Middle East situation boosts inflation expectations, gold sees largest weekly decline in six years.

With the Middle East war driving up energy prices and weakening expectations of interest rate cuts, gold is heading towards its largest single-week decline in six years. Spot gold hovered around $4650 per ounce on Friday, falling more than 7% for the week, marking the largest decline since March 2020. The surge in oil and natural gas prices sparked by the conflict has intensified inflation concerns, reducing the likelihood of interest rate cuts by central banks around the world, which is bearish for gold, which does not generate interest income. Gold has been falling for several weeks in a row since the end of last month's US attack on Iran.