Since the beginning of the week, the price of gold has fallen by 3%: the main factors behind the decline in the metal’s value
6 March 16:21
Gold was sluggish on Friday, March 6, amid demand for safe-haven assets due to escalating tensions in the Middle East, but may end the week lower as growing inflation concerns have reduced the likelihood of an interest rate cut in the US, Komersant reports , citing Reuters.
The spot price of gold rose 0.14% to $5,083.79 per troy ounce at 12:44 p.m. Kyiv time. Since the beginning of this week, the precious metal has fallen by more than 3%: the end of the month-long rally is being driven by the reduced likelihood of an interest rate cut and a volatile dollar.
“Geopolitical risk remains a key factor supporting prices, as it now appears that hopes for a quick resolution (of the conflict) in Iran will not be fulfilled. However, upside potential is limited by inflation concerns due to rising oil prices, which have reinforced the narrative of higher interest rates in the US for a longer period of time,” said Zain Wauda of OANDA.
Gold is considered a hedge against inflation in the long term, but it also tends to rise in price when interest rates are low because it does not generate interest income.
Since the beginning of 2026, the precious metal has risen in price by more than 18%. Israel launched airstrikes on the southern suburbs of Beirut, controlled by Hezbollah, on Friday and announced a new wave of strikes on infrastructure targets in Iran, while Tehran reported missile strikes on central Tel Aviv.
The dollar index against a basket of six major currencies rose 0.2% to 99.251, making gold more expensive for holders of other currencies, and could show its strongest rise in more than a year at the end of the week.
The US Federal Reserve is expected to keep interest rates at current levels at its March 18 meeting, according to the CME Group’s FedWatch tool.
Today, investors are awaiting US employment statistics for February.
Demand for physical gold in India declined this week as volatile prices scared off buyers, while premiums in China remained high due to growing investment demand.
Palladium rose 0.68% to $1,640.91 per ounce, while silver added 0.7% to $82.74 per ounce. The price of platinum increased 0.75% to $2,137.63. All of these metals may show a weekly decline.
