Gold Heads for Weekly Loss as Middle East Truce Saps Demand

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(Bloomberg) — Gold (GC=F) headed for its second consecutive weekly loss, after a ceasefire between Israel and Iran dented demand for havens.

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Bullion fell by more than 1% to around $3,291 an ounce on Friday and was down about by more than 2% for the week. The precious metal has generally been confined to a narrow trading band this week, although on Tuesday it slumped as the Middle East rivals honored a ceasefire agreement after almost two weeks of warfare.

The truce has signaled a return to risk-on market sentiment, which continued into Friday after Commerce Secretary Howard Lutnick said in a Bloomberg TV interview that the US and China have finalized a trade framework and the White House has imminent plans to reach agreements with a set of 10 major trading partners. Still, details of any potential deals are vague.

Bullion remains up more than a quarter this year, and is about $200 away from its record high reached in April. Along with geopolitical and trade tensions, it’s been supported by robust central-bank buying and increased optimism the Federal Reserve is preparing to resume monetary easing, with lower rates typically a positive for the non-interest-bearing precious metal.

Gold was down 1% to $3,294.47 as of 1:07 p.m. Singapore time. The Bloomberg Dollar Spot Index rose 0.1%. Silver fell. Palladium climbed again and was up around 9% for the week. Platinum fell after hitting the highest level in more than a decade on Thursday.