NEW YORK / Content Syndication Services / — Gold fell to a more than one-week low on Friday and was headed for a weekly loss as higher oil prices stoked inflation concerns, lifted U.S. Treasury yields and strengthened the dollar, weakening demand for bullion. Spot gold dropped 2% to $4,557.25 an ounce, extending its slide to a fourth straight session, while U.S. gold futures for June fell 2.7%. The move left the metal down 3.3% for the week after a sharp retreat from recent record highs.
Oil prices added to the pressure after supply disruption fears in the Middle East drove another weekly advance in crude. Brent crude traded at $107.49 a barrel and U.S. West Texas Intermediate stood at $103.30, leaving the two benchmarks up nearly 6% and more than 7% for the week, respectively. The rise in energy prices fed concern that inflation could remain elevated for longer, especially as shipping risks and tighter flows around the Strait of Hormuz continued to unsettle commodity markets.
The inflation signal was reinforced by fresh U.S. data this week. The U.S. Bureau of Labor Statistics reported that consumer prices rose 3.8% in the 12 months through April, up from 3.3% in March, while the energy index climbed 17.9% from a year earlier. Producer prices also accelerated, with the final demand index rising 1.4% in April and 6.0% from a year earlier. That backdrop pushed the 10-year Treasury yield toward a one-year high and helped lift the dollar by more than 1% for the week.
Inflation pressure widens
Higher yields tend to undercut gold because the metal does not offer interest, making it less attractive when returns on government debt rise. The renewed climb in yields also hardened expectations that the Federal Reserve may keep policy tighter for longer than previously expected. That shift in rates sentiment weighed across the precious metals complex, not just bullion, as investors adjusted positions after a week dominated by stronger energy prices and firmer U.S. inflation readings.
Losses spread through the wider market. Silver was down 6.4% for the week, while platinum fell 2.7% and palladium slipped 0.7%. Physical demand also offered limited support. In India, dealers reported record discounts after the government raised gold and silver import tariffs to 15% from 6% and imposed tighter limits on duty-free imports for jewellery exporters. Discounts widened to as much as $207 an ounce over official domestic prices as higher local prices curbed buying and prompted more resale into the market.
Physical demand diverges across Asia
Elsewhere in Asia, the picture was more mixed. Premiums in China held firm at about $15 to $20 an ounce as investment and industrial demand remained steady, helping cushion regional trade flows even as global benchmark prices fell. Investors also kept watch on talks in Beijing between U.S. President Donald Trump and Chinese President Xi Jinping, but bullion remained primarily driven by the combination of rising oil prices, stronger U.S. yields and a firmer dollar.
By late Friday, the week’s trading had left gold under pressure from a market that was increasingly focused on inflation and interest rates rather than on bullion’s traditional role as a hedge against uncertainty. The metal’s drop was accompanied by broader weakness across precious metals and softer buying in one of its biggest consumer markets. With oil still elevated and U.S. price data coming in hot, the latest selloff underscored how quickly higher energy costs can ripple through global asset markets.