Gold prices climbed to $4,806.19 per ounce Friday, marking a fourth consecutive weekly gain as investors bet on easing Middle East tensions and persistent inflation concerns. The rally comes amid unconfirmed reports of progress in U.S.-Iran nuclear negotiations.
Market analysts attribute the surge to three key factors: reduced geopolitical risk premiums, ongoing central bank buying, and hedge fund positioning ahead of next week’s Federal Reserve meeting. ‘Gold is behaving like a pressure gauge for global uncertainty,’ said a London-based commodities trader who requested anonymity due to company policy.
The U.S. dollar index fell 0.3% alongside the gold rally, while Treasury yields remained flat. Some analysts suggest the move reflects positioning ahead of next week’s PCE inflation data – the Fed’s preferred price gauge.
However, skeptics note gold’s 14-day relative strength index now sits at 72, well into overbought territory. ‘This looks like speculative froth rather than sustainable demand,’ warned Capital Economics analyst James O’Rourke in a client note.