Gold faces weekly decline as oil surge dims rate cut hopes

Gold prices edged higher on Friday as a softening dollar and declining Treasury yields provided some support. However, the precious metal remains on track for its second straight weekly decline, pressured by a surge in energy costs that has complicated the outlook for interest rate cuts in the United_States. Spot bullion climbed 0.8% to reach $5,118.75 per ounce by early Friday, while gold futures remained steady at $5,123.30. Despite the daily gain, the asset has surrendered approximately 1% of its value over the course of the week. > The dollar has eased from its highs which has opened the door for gold to make headway amid the ongoing geopolitical risks. Tim Waterer, chief market analyst at KCM Trade, noted that while the weaker greenback is beneficial, persistent concerns regarding inflation and the Federal Reserve's ability to lower rates amid high energy prices are tempering the metal's appeal. Geopolitical tensions in the Middle East have intensified following statements from Iran's Supreme Leader Mojtaba Khamenei, who suggested the strategic Strait of Hormuz could be closed as a measure against the American government and Israel. This development, alongside recent attacks on tankers in the Gulf, has pushed Brent_Crude_Oil prices above $100 per barrel. The spike in energy prices has reignited inflation fears, prompting renewed calls from President Donald Trump for Federal Reserve Chair Jerome Powell to implement rate cuts. Market participants currently anticipate the central bank will maintain interest rates between 3.5% and 3.75% during the upcoming policy meeting on March 18. In the broader precious metals market, Silver rose 1.4% to $84.96 per ounce. Platinum saw a gain of 0.9%, trading at $2,151.97, while Palladium advanced 1.4% to $1,640.64. Investors are now looking ahead to the release of the Personal Consumption Expenditures Index for further clues on the inflationary environment.