Gold (XAU/USD) trades on the back foot on Friday, struggling to build on the previous day’s gains and heading for a weekly loss as renewed hostilities in the Middle East have revived fears of energy-driven inflation and Federal Reserve (Fed) interest rate hikes.
At the time of writing, XAU/USD is trading around $4,104, down 0.45% on the day
The metal, however, lacks follow-through selling as traders reassess US-Iran tensions following reports that technical talks are continuing despite the military clashes, prompting a pullback in crude Oil prices. Reuters reported that Qatari mediators are in Iran for talks aimed at creating conditions for broader negotiations. Can Gold stage a sustained recovery?
While Gold has staged a modest rebound from $3,941, its lowest level since November 2025, the metal is struggling to attract meaningful buying interest. Since the US-Iran war broke out in February, Gold has behaved less like a traditional safe-haven asset and more like a rate-sensitive instrument, with price action largely driven by the hawkish repricing of Fed interest rates. As a result, Gold posted its worst quarterly performance in thirteen years, while traders also booked profits following an exceptional two-year rally that pushed prices to a record high near $5,600 in January.