Gold prices edged higher during Friday's Asian trade, attempting to stabilise above the US$4,400 level, although the precious metal remains on track to record a fourth consecutive weekly loss amid persistent geopolitical and macroeconomic pressures.
By 3:25 pm AEDT (4:25 am GMT), spot gold rose 1.3% to $4,436.17 per ounce, recovering from a test of support near $4,350 earlier in the week
The outlook for gold continues to be weighed down by strength in the U.S. dollar, which has attracted safe-haven flows as tensions escalate in the Middle East.
Investors remain concerned about the possibility of a U.S. ground operation targeting Iran’s key oil infrastructure, particularly around Kharg Island.
According to a report by The Wall Street Journal, citing defence officials, the Pentagon is considering deploying up to 10,000 additional troops to the region, providing U.S. President Donald Trump with expanded military options even as diplomatic efforts continue.
The developments come despite Trump’s recent decision to extend a pause on attacks against Iran’s energy infrastructure by 10 days, pushing the deadline to 6 April.
The move was initially interpreted as a signal of de-escalation, though market participants remain sceptical about the prospects for a swift resolution.
Ongoing uncertainty has limited gold’s upside, with investors reluctant to fully commit amid conflicting signals from Washington and Tehran.
Markets appear to be pricing in a prolonged conflict, dampening demand for the non-yielding asset.
At the same time, elevated oil prices have fuelled concerns about persistent inflation, leading investors to reassess the outlook for monetary policy.
Expectations for an interest rate cut from the Federal Reserve this year have also been priced out, according to the CME Group FedWatch Tool, providing further support to the U.S. dollar while weighing on gold.
