HG MARKETS:

Gold prices edged higher on Friday but remained on track for a weekly decline as a stronger U.S. dollar and rising Treasury yields weighed on the metal, overshadowing safe-haven demand linked to escalating tensions in the Middle East. Spot gold rose 0.4% to $5,101.35 per ounce, while gold futures gained 0.6% to $5,110.14. Despite the daily increase, bullion is set to fall more than 3% for the week amid reduced expectations for near-term interest-rate cuts and continued strength in the U.S. dollar.

Geopolitical tensions continued to support market caution, as the conflict involving the United States, Israel, and Iran entered its seventh day with no signs of de-escalation. Missile strikes and retaliatory attacks across the region have raised concerns about potential disruptions to global energy supplies. Adding to uncertainty, U.S. President Donald Trump indicated he would like a role in deciding Iran’s leadership once the conflict ends, highlighting the fragile political outlook in the region.

Although gold typically benefits from geopolitical instability and lower interest rates, the metal struggled to maintain strong upward momentum this week. The U.S. Dollar Index is on track for a weekly gain of around 1.5%, while U.S. Treasury yields have also moved higher, both of which reduce the appeal of non-yielding assets such as gold.

Meanwhile, oil prices have surged nearly 18% this week amid fears that the conflict could disrupt key energy infrastructure and shipping routes in the Gulf. The sharp rise in crude prices has fueled concerns about a potential resurgence in global inflation, complicating the policy outlook for major central banks, including the U.S. Federal Reserve.

Market participants are now closely watching the U.S. February nonfarm payrolls report due later on Friday. A stronger-than-expected reading could signal continued strength in the labor market and reinforce expectations that the Federal Reserve may delay interest-rate cuts, which could further influence the outlook for gold prices.