As investors booked profits following recent record highs, gold fell more than 1% on Friday, and indications of a reduction in global tensions further diminished the metal's appeal as a safe haven. At $4,606.54 per ounce, spot gold was down 0.2%.
However, after reaching a record high of $4,642.72 on Wednesday, the metal is set for its second straight weekly increase of roughly 1.9%.
At $4,595.40, U.S. gold futures for February delivery ended the day 0.6% down. After weeks of strong gains and some profit taking, the commodity complex is generally retreating.
According to Marex analyst Edward Meir, "part of the geopolitical premium in gold and other metals, especially silver, has also been removed by the de-escalation of Middle East tensions."
While U.S. President Donald Trump adopted a wait-and-see strategy and Russian President Vladimir Putin sought to mediate in Iran and defuse the situation, geopolitical tensions seemed to lessen as protests in Iran decreased.
In terms of commerce, the United States and Taiwan reached an agreement on Thursday that cuts tariffs on a large number of Taiwan's semiconductor exports, directs fresh investments into American technology, and runs the risk of upsetting China.
According to statistics gathered by LSEG, the Federal Reserve is anticipated to maintain current rates for the first half of the year, with a first 25 basis point drop anticipated in June.
When interest rates are low and there is economic and geopolitical uncertainty, safe-haven gold often performs well. Meir stated, "I still think we have a chance of reaching $5,000 sometime this year, punctuated with these big corrections in the interim."
After reaching an all-time high of $93.57 in the previous session, spot silver was on track for a weekly gain of more than 12%, but it lost 3.6% to $89.00 per ounce.
Silver is susceptible to a severe correction due to growing threats ranging from loosened ex-U.S. supply and ETF outflows to lower industrial demand and tougher Chinese trading restrictions, according to a note released by JPMorgan on Friday.
While palladium shed 2.4% to $1,831 per ounce, spot platinum fell 3.8% to $2,303.40 per ounce and was on its way to a weekly gain.
