Gold prices experienced a significant rebound on Friday, increasing more than 3% due to dip-buying after earlier losses during the week. This surge comes as investors closely monitor the evolving situation in the Middle East for potential signs of de-escalation in ongoing conflicts.
Market Movement and Key Data
Spot gold rose by 2.6% to $4,491.78 per ounce in afternoon trading, hitting an intraday high of $4,554.39. Meanwhile, U.S. April gold futures closed 2.7% higher at $4,492.50. The precious metal had earlier hit a four-month low of $4,097.99 on Monday, underscoring the volatility impacting commodities markets.
Investor Sentiment and Strategic Outlook
Market strategists highlight that the recent selloff created an attractive buying opportunity, with prices dipping below the 200-day moving average. Analysts predict a gradual upward trend in gold prices over the coming weeks, contingent on the trajectory of geopolitical tensions and related market conditions.
Impact of Middle East Conflict and Oil Prices
Despite U.S. President Donald Trump extending a deadline for striking Iran’s energy infrastructure to April 7 in hopes of diplomatic progress, oil prices remained elevated above $110 per barrel. The conflict, now spanning its fourth week, has disrupted global energy supplies, resulting in increased inflation concerns due to rising energy and fertilizer costs.
Federal Reserve Policy Influence
Heightened inflationary pressures have influenced Federal Reserve policy expectations, steering markets towards the possibility of further interest rate hikes, which commonly exert downward pressure on gold due to its non-yielding nature. Financial markets currently price out any rate cuts for 2026, differing from earlier projections that anticipated two cuts prior to the outbreak of regional conflict.
Forecasts and Other Precious Metals
Commerzbank has revised its year-end forecast for gold upward, increasing its target price from $4,900 to $5,000 per ounce, anticipating that the recent price corrections are unlikely to persist. The bank expects the Iran conflict to subside in the spring, which could moderate the outlook for aggressive rate hikes and prompt rate reductions later this year. Other precious metals also showed gains, with silver rising 2.2% to $69.54 per ounce, platinum gaining 2.3% to $1,868.89, and palladium up 1.8% at $1,377.25.
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