- US may remove sanctions on Iranian oil stranded in tankers
- Trump tells Israel not to repeat strikes on Iranian energy
- Gold lost over 6% this week
March 20 (Reuters) - Gold prices edged up on Friday on technical buying, but were headed for a third consecutive weekly decline, pressured by a firm U.S. dollar and as a hawkish U.S. Federal Reserve dampened hopes for near-term interest rate cuts.
Spot gold rose 0.6% to $4,675.23 per ounce as of 0702 GMT, rebounding from a near two-month low hit in the previous session.
U.S. gold futures for April delivery rose 1.6% to $4,676.90.
"Gold held some important technical supports in the weekly time frame and gold may see a recovery to the level where it broke down, around $4,800," said Nicholas Frappell, global head of institutional markets at ABC Refinery.
However, bullion has lost over 6% so far this week. Spot gold has fallen more than 10% since the U.S.-Israeli strike on Iran on February 28.
The dollar has emerged as one of the clearest "safe-haven" winners, strengthening over 2% so far this month. Meanwhile, the Fed kept rates steady on Wednesday and indicated that inflation could rise.
Interest rate futures show traders see little chance of a Fed reduction this year, according to the CME's FedWatch tool.FEDWATCH
Gold is considered an inflation hedge, but high interest rates turn yield-bearing assets more attractive, while a stronger dollar makes the bullion more expensive for holders of other currencies.
"After notable underperformance during the Middle East conflict, participants were poised to sell rather than buy gold and were listening out for a reason to confirm their sentiments," Frappell said.
Oil prices fell on Friday but stayed above $105 a barrel Israel launched further attacks on Tehran, a day after President Donald Trump told it not to repeat its strikes on Iranian natural gas infrastructure, sharply escalating the war.
On Thursday, Treasury Secretary Scott Bessent said the U.S. may soon remove sanctions from Iranian oil stranded on tankers.
Meanwhile, gold discounts in India eased this week from near decade-high levels hit last week, helped by festive buying and a sharp correction in prices, while premiums in China declined as physical demand softened.
Spot silver fell 1.7% to $71.66 per ounce. Spot platinum rose 0.2% at $1,974.45 and palladium added 1% to $1,461.36.
Reporting by Noel John in Bengaluru; Editing by Sumana Nandy and Janane Venkatraman
Source: Reuters