Gold advanced on Friday after oil prices and U.S. Treasury yields eased, relieving some market pressure on inflation expectations in the wake of a Federal Reserve interest rate increase earlier this week.
At 21:28 ET (01:28 GMT), spot gold (XAU/USD) was trading up 0.5% at $4,361.31 an ounce, while Gold Futures were largely unchanged at $4,399.87. Silver (XAG/USD) rose 1% to $65.88 an ounce and platinum (XPT/USD) gained 1% to $1,790.41. The U.S. Dollar Index was little changed at 100.22.
The uptick in precious metals follows a near 2% gain on Thursday, which helped bullion regain much of the ground lost over the previous three sessions. That reversal occurred after Treasury yields fell across maturities, retracing some of the spike that followed the Fed's unanimous decision to raise interest rates by 25 basis points on Wednesday.
Lower yields reduce the opportunity cost of holding non-yielding assets such as gold, and the easing in oil prices has taken some heat off immediate inflation concerns. Oil fell for a third consecutive day as expectations diminished for sustained supply disruptions in the Middle East - Saudi Arabia indicated it expected to restore flows through a key pipeline within days, and some tankers continued to transit the Strait of Hormuz.
Despite the recent rebound, the market remains attentive to the path of monetary policy. Comments from Fed Chair Kevin Warsh have moved market expectations toward at least one more rate increase this year and the possibility of up to two additional hikes in 2027, a factor that presents an ongoing headwind to bullion given tighter policy generally weighs on non-yielding assets.
Technical and investor positioning have lent support to the rally. Thursday's gains pushed gold back above its 100-day moving average, a commonly used indicator of market momentum. Still, bullion is trading nearly 20% below levels recorded before the Iran war began in late February.
Investor flows into gold instruments have strengthened alongside price action. Gold-backed ETFs tracked by Bloomberg have seen billions of dollars in inflows, and ANZ reported that holdings in those funds increased for eight straight sessions. ANZ analysts also noted robust demand for options on some of the largest gold-backed ETFs, signaling active investor positioning despite expectations for tighter monetary policy.
For now, the combination of lower energy prices and softer Treasury yields has given gold room to recover after the Fed decision. The longer-term outlook remains subject to shifts in central bank guidance and macro drivers, while investor appetite for ETF exposure and options activity continues to shape near-term market dynamics.