Gold steady as Israel-Iran conflict escalates, US involvement uncertain
KUALA LUMPUR: Gold held steady on Friday, with geopolitical tensions escalating in the Middle East as Israel and Iran continued their air war, while investors remained wary of possible US involvement.
Spot gold was steady at US$3,367.60 an ounce, as of 0020 GMT. Bullion was down 1.90 per cent so far this week.
US gold futures were also stable at US$3,384.20.
The conflict in the Middle East intensified on Thursday when Israel bombed Iran's nuclear sites, while Iran fired missile and drone strikes on Israel, including an overnight attack on an Israeli hospital. Neither side has signalled an exit strategy.
US President Donald Trump will decide in the next two weeks whether the US will get involved in the Israel-Iran air war, the White House said on Thursday, raising pressure on Tehran to come to the negotiating table.
Meanwhile, US special envoy Steve Witkoff and Iranian Foreign Minister Abbas Araqchi have spoken by phone several times since Israel began its strikes on Iran last week, in a bid to find a diplomatic end to the crisis, three diplomats told Reuters.
Trump reiterated his calls for the Federal Reserve to cut interest rates, saying the rates should be 2.5 percentage points lower.
The Fed held rates steady on Wednesday, and policymakers retained projections for two quarter-point rate cuts this year.
European officials are increasingly resigned to a 10 per cent rate on "reciprocal" tariffs being the baseline in any trade deal between the US and the European Union, five sources familiar with the negotiations said.
The US dollar index fell 0.20 per cent, making greenback-priced bullion more affordable for overseas buyers.
Elsewhere, spot silver was steady at US$36.36 per ounce, platinum fell 0.70 per cent to US$1,297.89, while palladium was down 0.40 per cent to US$1,046.71. All three metals were headed for weekly gains.
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