Gold Rebounds From Weekly Lows Amid Ongoing Rate Uncertainty

Gold (XAU/USD) rose 0.47% to US$3,995.35 per ounce on Friday as buyers returned following the previous session's sharp decline. Despite the rebound, bullion remained down roughly 3% for the week, putting it on track for its largest weekly decline since early June.

Middle East tensions and interest-rate outlook remain in focus

Escalating tensions between the United States and Iran have coincided with higher oil prices and renewed inflation concerns, contributing to stronger demand for the U.S. dollar and U.S. Treasury yields.

Recent U.S. military strikes on Iranian targets followed reports of an attack on a tanker near one of Iran's main export terminals, while elevated energy prices have added uncertainty to the Federal Reserve's inflation outlook.

Markets look beyond recent inflation data

Although this week's U.S. CPI and PPI reports suggested inflation pressures had moderated, market attention shifted toward the potential impact of higher energy prices on future inflation trends.

Tony Sycamore, Senior Market Analyst at IG, said the limited rebound following the latest inflation data suggested that sentiment remained cautious. He added that the late-June low near US$3,942 could remain an important reference point for the market.

Technical reference levels

1. US$3,942 represents a recent support area identified by market analysts.
2. US$4,140 marks a resistance level that has limited recent price advances.

Federal Reserve Chair Kevin Warsh, Governor Christopher Waller, and New York Fed President John Williams have all reiterated that inflation remains above the central bank's 2% target, indicating that policymakers continue to emphasize price stability.

Other precious metals

1. Silver (XAG/USD): −0.18% to US$55.43/oz
2. Platinum (XPT/USD): −2.0% to US$1,589.57/oz

The moves reflected mixed performance across the precious metals sector.