By: Economy Middle east

Gold prices declined on Friday and were on track for a weekly decline as investors stayed cautious about the ongoing Iran conflict and its potential implications for interest rates.

As of 7:20 GMT, spot gold slipped 0.35 percent to $4,525.2 per ounce, while gold futures also eased 0.38 percent to $4,526.92 an ounce.

In the UAE, gold rates edged lower, with 24-carat gold losing AED1.75 to AED545.75 and 22-carat gold falling AED1.75 to AED505.25.

Additionally, 21-carat gold edged AED1.5 lower to AED484.5 and 18-carat gold eased AED1.5 to AED415.25.

Meanwhile, 14-carat gold lost AED1 to AED324.

Gold set for weekly loss amid conflicting U.S.-Iran signals

Gold prices were on track to post a weekly loss of around 0.3 percent, after experiencing sharp fluctuations amid conflicting signals from the U.S. and Iran regarding ongoing negotiations. Optimism over a possible resolution to the conflict grew after U.S. President Donald Trump delayed a military strike on Iran, while reports indicated that a final peace deal draft had been completed.

However, Trump later warned that Washington could launch strikes on Iran if Tehran refused to accept an agreement, with Iran’s nuclear program remaining a major sticking point. Reports also showed that Iran rejected U.S. calls to surrender its enriched uranium stockpile.

Meanwhile, U.S. officials criticized Tehran’s proposal to impose charges on transit through the Strait of Hormuz. Limited oil flows through the vital waterway continued to keep crude prices elevated.

Inflation and Fed rate hike concerns pressure gold prices

The Iran conflict still appeared far from resolution, leaving investors concerned about prolonged disruptions to global oil supplies and the resulting inflationary pressures.

U.S. inflation accelerated over the past two months as rising oil prices added to price pressures, fueling speculation that the Federal Reserve could be compelled to raise interest rates later this year.

Minutes from the Fed’s late-April meeting showed that a growing number of policymakers favored additional rate hikes, a development seen as negative for gold prices and other non-yielding assets.

Other precious metals

As gold prices declined, the broader precious metals market witnessed downward movement. Spot silver fell 0.77 percent to $76.11, while platinum dipped 1.32 percent to $1,939.93. In addition, palladium fell 0.53 percent to $1,371.05.