Gold Set for Worst Week in Six Years as War Curbs Rate-Cut Bets

Gold headed for the biggest weekly loss in six years, as the war in the Middle East lifted energy prices and reduced expectations for rate cuts.

Bullion traded near $4,650 an ounce on Friday, down about 7% this week, the most since March 2020. Soaring crude and gas prices triggered by the conflict are raising inflation concerns, reducing the prospects of central banks lowering borrowing costs. That’s a headwind for gold, which doesn’t pay interest.

The precious metal — widely viewed as a haven asset — has dropped every week since the US and Israel attacked late last month. The retreat has come as Treasury yields and the US dollar gained ground, investors sold bullion to cover losses elsewhere, and gold-backed exchange-traded funds posted outflows.

The US Federal Reserve met midweek to assess policy, opting to leaves rates unchanged as widely expected. Chair Jerome Powell emphasized that to resume easing, officials would have to see progress in reducing inflation.

Gold for immediate delivery was little changed at $4,653.11 an ounce at 6:42 a.m. in Singapore, after capping a seven-day losing run on Thursday, the longest slide since October 2023. Silver traded near $72.74 an ounce, down about 10% this week. Palladium and platinum also headed for weekly losses.