Gold Rebounds as Middle East Conflict Escalation Drives Safe-Haven Demand

Gold Prices Recover but Face Weekly Loss

Spot gold was up 1% at $5,128.39 per ounce as of 0506 GMT on Friday, rebounding from a drop of more than 1% in the previous session. U.S. gold futures for April delivery gained 1.2% to $5,137.50.

Despite Friday’s gains, the metal has fallen roughly 3% so far this week and is on track to break a four-week winning streak. Bullion has nonetheless risen about 18% so far this year, repeatedly setting record highs amid ongoing geopolitical and economic uncertainty.

The U.S. dollar weakened during the session, making dollar-denominated gold less expensive for holders of other currencies and providing additional support to prices.

Kelvin Wong, senior market analyst at OANDA, cited ongoing geopolitical risk as a key driver: Iranian foreign minister comments that Iranian forces are prepared for a ground invasion by the U.S. or Israel were described as supportive for gold prices.

Geopolitical Tensions and Technical Outlook

The latest price move comes on the sixth day of the war, during which Iran launched a series of attacks on Israel, the United Arab Emirates and Qatar. The U.S.-Israeli military campaign against Iran, which began on Saturday, has struck targets across the country and prompted Iranian retaliation. U.S. Defense Secretary Pete Hegseth and Admiral Brad Cooper, head of U.S. forces in the Middle East, stated that the United States has sufficient munitions to maintain its bombardment indefinitely.

Wong said gold prices are likely to remain volatile in the near term, identifying key support at $5,040 per ounce and resistance at $5,280. He added that prices could climb to $5,448 if the resistance level is breached.

Moves in Margins and Other Precious Metals

CME Group adjusted margin requirements on Thursday, cutting the initial margin on its COMEX 100 gold futures contracts to 7% from 9%. The margin on COMEX 5,000 silver futures was reduced to 14% from 18%.

Among other precious metals, spot silver rose 2.6% to $84.26 per ounce. Spot platinum gained nearly 1.6% to $2,154.60, while palladium climbed 2.2% to $1,665.21.

FAQ

Why did gold prices rise on Friday?
Gold prices rose as investors sought safe-haven assets amid heightened uncertainty and a risk of further escalation in the Middle East conflict, alongside support from a weaker U.S. dollar.

How has gold performed so far this year?
Gold has gained about 18% year to date, registering successive record highs driven by geopolitical and economic uncertainty.

What technical levels are analysts watching for gold?
Kelvin Wong of OANDA highlighted support at $5,040 and resistance at $5,280 per ounce, with potential for prices to move up to $5,448 if resistance is broken.

What changes did CME Group make to margin requirements?
CME Group reduced the initial margin on COMEX 100 gold futures to 7% from 9% and lowered the margin on COMEX 5,000 silver futures to 14% from 18%.