Gold Market Declines
Gold prices fall as Fed rate hike fears and Middle East tensions weigh on markets.
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Gold prices fell across major markets on Friday and were set for a weekly decline as investors weighed Middle East uncertainty against mounting expectations that the Federal Reserve will keep rates higher for longer. In India, MCX gold slid on concerns about inflation from disrupted energy supplies and on the push-pull between safe-haven demand and stronger expectations for tighter U.S. monetary policy, with traders watching the upcoming U.S. nonfarm payrolls data. Overseas, spot and futures prices weakened as Hezbollah rejected a Lebanon ceasefire proposal and Israel signaled it would not withdraw troops, dimming prospects for a U.S.-Iran peace deal championed by current President Donald Trump. Fed commentary highlighted that policymakers could either stay patient or raise rates further to contain persistent inflation, and markets, via FedWatch, were pricing a meaningful chance of a hike before year-end. Analysts also pointed to technical weakness in COMEX gold, warning that a break below key support could deepen the downturn. Other precious metals moved lower as the same rate-hike and stronger-dollar outlook pressured the non-yielding complex.
Key Points
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President Donald Trump said U.S.-Iran negotiations were “approaching their final stage” and signaled he was reluctant to be drawn into a broader conflict, but Iranian Foreign Minister Abbas Araghchi countered that “no meaningful progress had been achieved.”
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CME Group’s FedWatch tool put the odds of a U.S. rate hike at 51% before the end of the year, reinforcing market expectations for tighter policy. Kansas City Fed President Jeffrey Schmid said policymakers could either “remain patient or raise rates further to tackle persistent inflation,” while San Francisco Fed President Mary Daly said the path would depend on incoming economic developments.
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RHB Investment Bank flagged that COMEX’s technical picture remained weak and warned that a break below the $4,400 support level could deepen the decline toward $4,250; it also advised traders to keep short positions initiated at $4,605.70 with a stop-loss at $4,850, noting COMEX was below both the 20- and 50-day moving averages despite a modest rebound.
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Vietnam’s gold market also fell: gold prices declined and had shed 2.9% for the week, while the gold ring price dropped 1.03% to VND154.2 million per tael. Reuters cited ABC Refinery’s Nicholas Frappell saying the lack of progress on the Iran conflict was adding “pessimism around the resolution,” and that the broader trend was to expect “tighter interest rate markets.”
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