Key Points

Gold prices edged higher on Friday, while silver experienced volatile trading. Both precious metals faced selling pressure on Thursday and are set to close the week lower. Investors are closely monitoring developments in the U.S.-Iran conflict and its potential impact on oil prices and inflation.

After a significant sell-off in the previous session, gold prices saw a modest rebound on Friday, whereas silver extended its decline. Spot gold rose 0.3% to $4,662.51 per ounce, retreating from larger gains seen earlier in the session. Gold futures increased by 1.2%, reaching $4,662.10. Spot silver was last down approximately 1.7% at $71.62 per ounce, having fluctuated between gains and losses during morning trading. Silver futures, however, climbed about 0.8%. Both gold and silver are on track for weekly losses, with gold poised for a decline of nearly 9% and silver expected to fall over 10%. The precious metals sector experienced broad-based selling on Thursday. Spot prices plunged sharply before paring losses to around 3% by the close, amid heightened concerns over the economic repercussions of the Iran conflict. Since the U.S. and Israel initiated military action against Iran, sharp volatility in the oil market has continued to influence global investor sentiment. Oil prices remained choppy on Friday, dipping initially before recovering slightly. Global stock markets displayed mixed performance on Friday. European equities lacked clear direction, while most Asian markets trended lower. U.S. stock index futures indicated a potential lower opening on Wall Street, reversing earlier signals of a rebound from Thursday's declines. An analyst noted that the extreme volatility in gold in recent weeks is partly due to a reversal following a sustained rally ahead of the initial U.S.-Israel strikes on Iran. "The previous gains have been almost entirely erased, and the decline has been quite substantial," he stated. "This is largely driven by momentum traders unwinding their positions." Both gold and silver recorded significant gains in 2025, surging 66% and 135% respectively for the year. However, trading volatility intensified markedly in 2026, with silver futures posting their largest single-day drop since the 1980s in late January. The analyst pointed out that during the 2025 gold bull market, "a significant influx of retail investors, systematic hedge funds, and general investor capital entered the market." "These were not long-term strategic allocations to gold," he commented. "Central banks have been consistent buyers since the Ukraine conflict and the freezing of Russian assets. I believe central banks drove the first wave of this multi-year gold bull market, which was then followed by trend-following traders and retail investors. These funds are now exiting, which may represent a necessary correction before gold can embark on its next upward move." Another investment chief suggested that gold and silver prices are influenced by both daily supply and demand dynamics and their associated "safe-haven premium." "I do not view it as a tool for hedging daily volatility in risk assets," he remarked. "Its trajectory is more influenced by long-term trends rather than short-term safe-haven trading."