Gold prices rise 3 percent on dip buying and war tensions
Spot gold rose 3.6 percent to $4,536 on Friday as investors bought the dip. Middle East tensions and shifting Fed rate outlooks continue to drive the market.
Gold prices surged by more than 3% on Friday as investors capitalized on a recent price dip, while simultaneously monitoring geopolitical developments in the Middle East. Spot gold increased 3.6% to $4,536.29 per ounce, recovering from a four-month low of $4,097.99 reached earlier in the week. In the United States, gold futures for April delivery also rose 3.6%, reaching $4,533.70.
Daniel Pavilonis, senior market strategist at RJO Futures, suggested that the drop below the 200-day moving average provided a significant buying opportunity for market participants.
The recent selloff created a really good opportunity because the market sold off... prices went below the 200-day moving average...this is an incredible time to buy gold.
The market remains focused on the conflict involving Iran, which has now entered its fourth week. Despite efforts to de-escalate, Tehran recently rejected a 15-point proposal from Washington. Amid these tensions, Brent Crude Oil prices remained elevated, holding above $110 per barrel. The ongoing war has impacted the global economy through rising energy and fertilizer costs, intensifying concerns regarding inflation.
These inflationary pressures have influenced the Federal Reserve's policy outlook. Traders have largely adjusted their expectations, pricing out potential interest rate cuts for 2026, according to the CME Group’s FedWatch Tool. Higher interest rates generally increase the opportunity cost of holding non-yielding assets like gold. However, some analysts remain bullish on the metal's long-term prospects. Commerzbank recently raised its year-end target for gold to $5,000 per ounce, up from $4,900, anticipating that the current price correction will not last.
Pavilonis expects a gradual upward trend for the precious metal in the near term.
Were going to see a slow grind higher over the next couple of weeks.
The rally in gold was mirrored across the broader precious metals sector. Silver climbed 4.4% to $71.01 per ounce, while Platinum increased by 3% to reach $1,882.05. Additionally, Palladium saw an increase of 3.7%, ending the session at $1,403.54.
