Middle East war suppression, rate cut betting, gold price on track for worst weekly performance in six years.

Due to the Middle East war pushing up energy prices and weakening expectations of interest rate cuts, the price of gold is heading towards its largest weekly decline in six years. On Friday, gold hovered around $4,640 per ounce, a decrease of about 7% for the week, marking the biggest drop since March 2020. The conflict-induced surge in crude oil and natural gas prices has exacerbated inflation worries, thereby reducing the possibility of central banks lowering borrowing costs. This poses a headwind for gold, which does not yield interest. Since the end of last month when the US and Israel attacked Iran, this precious metal widely viewed as a safe haven asset has been declining weekly. At the same time, US bond yields and the dollar exchange rate have both risen, prompting investors to sell off gold to make up for losses in other areas, leading to outflows from gold-supported exchange-traded funds. The Federal Reserve of the United States held a meeting this week to assess policy and, as widely expected by the market, decided to keep interest rates unchanged. Chairman Powell emphasized that in order to restart accommodative policies, officials must see progress in reducing inflation. The spot price of gold is reported at $4,645.59 per ounce, remaining relatively stable. The price of silver is close to $72.41 per ounce, with a weekly decline of about 10%. Palladium and platinum are also heading towards a weekly decline.