HG MARKETS:

Gold prices climbed more than 2% in Asian trading on Friday, supported by a modest pullback in the US Dollar Index and a slight easing in geopolitical tensions. Spot Gold rose 2.1% to $4,467.32 per ounce, while U.S. gold futures gained 1.1% to $4,457.6. This rebound followed a sharp decline of nearly 3% in the previous session, highlighting the highly volatile nature of the market. Despite Friday’s recovery, gold was still on track to post a small weekly loss, reflecting inconsistent sentiment among investors.
The price movement came after Donald Trump announced a temporary 10-day pause on attacks targeting Iran’s energy infrastructure, indicating that diplomatic negotiations were progressing positively. This development reduced immediate demand for traditional safe-haven assets like gold, as fears of a broader conflict eased slightly. However, the announcement also pressured the U.S. dollar, which provided indirect support to gold prices and helped fuel the rebound seen during the session.

Gold typically has an inverse relationship with the dollar, meaning that even a small decline in the currency can make bullion more attractive to global investors. The dollar index slipped around 0.1% after recording gains in the previous sessions, allowing gold to recover some of its recent losses. At the same time, the easing of geopolitical risks limited aggressive buying, as traders balanced reduced uncertainty with currency-driven support, resulting in a more measured upward move.

Overall, the gold market remains highly sensitive to both geopolitical developments and macroeconomic signals. Recent tensions in the Middle East had previously driven a sharp rally in oil prices, raising concerns about global inflation and the potential for prolonged high interest rates. Elevated energy costs can sustain inflationary pressure, which may push central banks to maintain tighter monetary policy. This creates a complex environment for gold, where competing forces safe-haven demand, interest rates, and currency movements continue to drive unpredictable and volatile price action.