NEW YORK: Gold prices surged more than 3percent on Friday on dip-buying after a pullback earlier this week, while investors looked for signs of de-escalation in the Middle East conflict.
Spot gold rose 3.6percent to USD4,536.29 per ounce as of 11:39 a.m. ET (1538 GMT). US gold futures for April delivery gained 3.6percent to USD4,533.70.
“The recent sell-off created a really good opportunity because the market sold off… prices went below the 200-day moving average…this is an incredible time to buy gold” said Daniel Pavilonis, senior market strategist at RJO Futures.
Spot gold touched a four-month low of USD4,097.99 on Monday. “We’re going to see a slow grind higher over the next couple of weeks. And then if this Iranian situation could kind of move past us, we have a pretty prime opportunity to be risk on,” Pavilonis said. Oil prices held above USD110 per barrel despite US President Donald Trump extending a deadline for Iran to reopen the Strait of Hormuz after Tehran rejected a 15-point US proposal to end the fighting.
The war, now in its fourth week, has spread across the Middle East, hitting the global economy with soaring energy and fertilizer prices that have fueled inflation fears.
Rising inflation has shifted the Federal Reserve outlook toward potential rate hikes, which typically weigh on gold by increasing the opportunity cost of holding the non-yielding asset.
Traders have fully priced out US rate cuts in 2026, according to CME Group’s FedWatch Tool, compared with expectations for two cuts before the war began.
However, Commerzbank raised its gold price forecasts, lifting its year-end target to USD5,000/oz from USD4,900, saying the recent pullback is unlikely to be sustained.
The bank expects the Iran war to end in the spring, which could temper current expectations for US rate hikes. It sees the Federal Reserve resuming rate cuts later this year, lowering rates by about 75 basis points by the middle of next year.
Spot silver rose 4.4percent to USD71.01 per ounce. Spot platinum gained 3percent to USD1,882.05, while palladium rose 3.7percent to USD1,403.54.
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