Investors price in prolonged high US interest rates and easing energy supply fears, pressuring gold prices despite Middle East tensions.
Gold extended losses for a third straight session and week, declining over 2% as markets reassessed US monetary policy and geopolitical risks. The metal faced pressure from hawkish remarks by Federal Reserve officials, reinforcing expectations of higher-for-longer interest rates.
Earlier gains driven by Middle East tensions were offset by the resumption of oil and LNG flows through the Strait of Hormuz, reducing fears of energy supply disruptions. While geopolitical risks persist, the shift in Fed rate expectations dominated investor sentiment.
Gold remains sensitive to developments in both the Middle East and US monetary policy, with traders balancing inflation concerns against potential rate cuts.