On Friday during the North American session, gold remains under pressure and is heading toward a second consecutive weekly loss, as the sharp rise in oil prices amid the ongoing war between the United States and Iran is intensifying inflation concerns and leading to a sharp reassessment of the interest-rate outlook, which is unfavorable for the non-yielding metal. At the time of writing, the XAU/USD pair is holding near the $5,050 level, remaining within the established range of $5,000–$5,200 per ounce.

The war in the Middle East is disrupting oil flows and increasing inflation risks, while tensions around the Strait of Hormuz continue to shake global energy markets. This key route has effectively been blocked by the Islamic Revolutionary Guard Corps since the start of the U.S.–Israeli campaign against Tehran. The International Energy Agency warns that the conflict in the region is triggering the largest supply disruption in the history of the global oil market, while Iran's new supreme leader Mojtaba Khamenei stated in his first public speech on Thursday that the blockade of the Strait of Hormuz should continue as an "instrument of pressure on the enemy."

Against this backdrop, gold finds itself at a crossroads. On one hand, persistently high geopolitical tensions create baseline demand for safe-haven assets and help limit the depth of the decline. On the other hand, the shift toward a more hawkish interest-rate trajectory and rising real yields on government bonds are restraining gold's growth, keeping it within its familiar trading range.

Before the conflict began, markets had priced in at least two interest-rate cuts by the Federal Reserve this year. However, as inflation risks increased and bond yields rose, expectations shifted noticeably. Investors now assume that rates will remain unchanged, and according to Bloomberg, only about 20 basis points of easing are priced in by December.

At the same time, markets have fully priced in the probability of a rate hike by the European Central Bank by July, while expectations have also grown that the Bank of England could tighten policy by the end of the year. This further supports yields on assets in developed economies and reduces the attractiveness of gold.

The weakening of expectations for Federal Reserve rate cuts is fueling the rise of the dollar and bond yields, increasing pressure on the precious metal. The U.S. Dollar Index, which tracks the U.S. currency against a basket of six major currencies, has climbed above the psychological level of 100, reaching its highest levels since October 2025, while yields on 10-year U.S. Treasury bonds remain around 4.25%, close to five-week highs.

Markets reacted rather calmly to the latest U.S. macroeconomic data, as investor focus remains on the escalating conflict in the Middle East. The Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation indicator, rose 0.4% month-over-month in January, matching forecasts and repeating December's pace, while the annual increase was 3.0%, slightly below the expected 3.1% and in line with December's figure. The second estimate of U.S. GDP for the fourth quarter indicates that the economy grew 0.7% year-over-year, compared with the previously estimated 1.4%, confirming a slowdown in activity amid tighter financial conditions.

From a technical perspective, if gold falls below the psychological level of $5,000, the next support level will be the 50-day simple moving average (SMA) near $4,950. After that, gold could accelerate its decline toward $4,840. If prices manage to break above the 20-day SMA, the round level of $5,200 will again act as resistance. Oscillators on the daily chart show mixed signals. Meanwhile, the Relative Strength Index (RSI) has moved into negative territory, indicating weakness among bulls.