Gold extended its consolidation near the USD 5,100 per ounce level on Friday and is on track to close lower for a second consecutive week.
The metal has come under pressure as rising geopolitical tensions have pushed energy prices higher, reinforcing concerns about inflation and tightening financial conditions.
This has resulted in a rise in US Treasury yields to multi-week highs, weighing on non-yielding assets such as gold.
Despite the inflationary concerns, ongoing tensions in Eastern Europe, with no clear path toward a near-term resolution, continue to sustain a geopolitical risk premium. At the same time, steady accumulation by central banks provides an underlying floor for the metal, helping preserve its longer-term bullish trend.
In the near term, investors are closely watching key economic data releases. However, the risks of persistent high energy prices could limit the Federal Reserve’s ability to shift toward a more accommodative stance, keeping gold sensitive to geopolitical developments.
