Rising oil prices limit gold's gains

In global markets, the ounce price of gold rose by 0.8 percent on Friday to reach 5,118.75 dollars, supported by a decline in the dollar and a retreat in US Treasury bond yields. Meanwhile, April gold futures in the US showed a flat trend at 5,123.30 dollars.

KCM Trade chief market analyst Tim Waterer stated, "The dollar's retreat from its highs has allowed gold to find room for growth amid ongoing geopolitical risks," while noting that gold has still lost approximately 1 percent of its value on a weekly basis.

It is pointed out that rising oil prices are weakening expectations for a short-term interest rate cut by the US Federal Reserve (Fed). With the increase in energy costs, doubts have grown regarding how quickly interest rates in the US can be lowered, which has unsettled investors. If high oil prices persist, inflationary pressure and uncertainty over monetary policy limit gold's appeal.

The slight decline in the US currency on Friday made gold and other commodities priced in dollars more advantageous for foreign investors. The drop in yields on 10-year US Treasury bonds also increased interest in gold, which does not yield a return.

Regional tensions are also fueling volatility in the markets. Most recently, statements by Iran's Supreme Leader Mojtaba Khamenei regarding the strategic closure of the Strait of Hormuz have heightened concerns, particularly in energy markets, and strengthened the possibility that disruptions in global energy supply will be reflected in prices.

US President Donald Trump has once again called on Fed Chair Jerome Powell to cut interest rates due to rising oil prices. Although the latest inflation figures suggest that price increases are under control, the market impact of the Iran tension and the sharp rise in oil prices has not yet been fully measured. Following these developments, investors are focused on the Personal Consumption Expenditures (PCE) price index for January, which will be released during the day.

In addition to gold, gains were also observed in other precious metals. Spot silver gained 1.4 percent to 84.96 dollars per ounce, platinum rose 0.9 percent to 2,151.97 dollars, and palladium increased 1.4 percent to 1,640.64 dollars.

News Source: 12punto