By: Economy Middle east

Gold prices climbed on Friday, supported by a weaker dollar and dip-buying, though it remained headed for a fourth consecutive weekly loss as higher energy prices stoked inflation fears and strengthened expectations of tighter global interest rates.

As of 5:07 GMT, spot gold was up 1.45 percent at $4,446.55 an ounce, but was still down roughly 1.2 percent for the week. Meanwhile, U.S. gold futures for April delivery advanced 1.54 percent to $4,443.90.

In the UAE, gold rates extended gains, with 24-carat gold rising AED6.25 to AED535.5 and 22-carat gold gaining AED5.75 to AED495.75.

Additionally, 21-carat gold inched up AED5.5 to AED475.25, while 18-carat gold edged up AED4.75 to AED407.5.

Meanwhile, 14-carat gold gained AED3.75 to AED317.75.

Gold prices fall around 16 percent since late February

On Friday, the U.S. dollar weakened 0.09 percent to 99.81, making gold, which is priced in the greenback, less expensive for buyers using other currencies. Gold prices have fallen about 16 percent since tensions in the Middle East erupted on February 28, weighed down by a stronger dollar, which has risen more than 2 percent over the same period.

“Gold, which up until recently had enjoyed a record run of gains, has come under pressure—not necessarily because its longer-term drivers have disappeared, but due to a shift in the macro backdrop,” said Ole Hansen, Head of Commodity Strategy, Saxo Bank.

“Higher energy prices are feeding into inflation expectations, which in turn are pushing bond yields higher and forcing markets to reassess the timing and extent of rate cuts. This tightening in financial conditions reduces the appeal of non-yielding assets such as gold in the short term,” he added.

Inflation risks boost bets for interest rate increase

Brent crude remained above $105 a barrel on Friday, intensifying inflation concerns as the conflict in the Middle East has nearly brought shipments through the Strait of Hormuz to a standstill. The waterway is a key route for around one-fifth of global crude and LNG trade.

President Donald Trump said on Thursday that he would extend the pause on strikes targeting Iran’s energy facilities into April, adding that talks with Iran were progressing very well. However, an Iranian official rejected the U.S. proposal to end the war, calling it one-sided and unfair.

Rising oil prices risk adding further pressure to inflation since they factor into the costs of shipping. Although inflation often supports gold prices by reinforcing the metal’s role as a hedge, elevated interest rates tend to reduce appetite for the non-yielding metal.

Traders are no longer pricing in any U.S. rate cuts for 2026 and now see a 35 percent probability of a rate increase by the end of the year, according to CME Group’s FedWatch Tool. That marks a sharp shift from expectations for two rate cuts before the conflict began.

Other precious metals

As gold prices rose, the broader precious metals market marked a strong rebound. Spot silver gained 2.89 percent to $69.77, while platinum surged 3.18 percent to $1,885.45. In addition, palladium gained 3.59 percent to $1,401.96.