Gold held firm above $4,600 an ounce on Friday, consolidating after a nearly 2% rally in the previous session. Prices were buoyed by a sharp depreciation in the US dollar, following reports that Japan had intervened in currency markets. Because gold is priced in US dollars, a weaker greenback typically supports demand for the metal.
Even so, bullion remained on course for a second consecutive weekly decline, as hopes for a US-Iran peace agreement faded and expectations grew that the Strait of Hormuz would stay closed for an extended period. US President Donald Trump said Washington would maintain its naval blockade of Iranian ports, while Tehran vowed not to abandon its nuclear program and indicated it intended to keep control of the strategic waterway.
The resulting disruption to energy supplies has intensified inflation concerns, bolstering expectations that major central banks may keep interest rates higher for longer or even tighten policy further. At the same time, data from the World Gold Council showed that central banks increased their gold reserves in the first quarter.
