The strengthening of the US dollar offsets safe-haven demand, gold maintains its decline and is set to record a weekly loss.

Investing.com - During Friday’s Asian trading session, gold prices remained stable after falling the previous trading day, as a strong dollar and rising U.S. Treasury yields offset safe-haven demand from the expanding Middle East conflict.

Precious metals also experienced a significant weekly decline, with recent dollar strength and diminished expectations of rate cuts putting pressure on gold prices.

As of 20:25 Eastern Time (01:25 Beijing Time), spot gold was roughly unchanged at $5,080.37 per ounce. U.S. gold futures rose 0.3% to $5,091.04.

Gold fell 1% the previous trading day and is set to decline nearly 4% this week.

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On Friday, the Middle East conflict entered its seventh day with no signs of easing, keeping global financial markets tense.

Over the past week, fighting between the U.S., Israel, and Iran has escalated, with missile strikes and retaliatory attacks spreading across the region, raising concerns over disruptions to global energy supplies.

U.S. President Donald Trump stated he hopes to influence the selection of Iran’s next leader after the war ends, highlighting increased political uncertainty in the region.

Due to threats to key energy infrastructure and shipping routes in the Gulf, oil prices continued their strong overnight rally. The surge in crude oil prices has sparked concerns about a new round of global inflation.

This complicates the outlook for global central banks, including the Federal Reserve. Rising oil prices often push inflation higher, which may make policymakers more cautious about cutting rates in the short term.

Investors are now focusing on the U.S. February non-farm payroll report, which will be released later Friday, potentially providing new signals about labor market strength and monetary policy direction.

Better-than-expected data could reinforce the view that the Fed has room to delay rate cuts.

Gold typically benefits from geopolitical uncertainty and lower interest rates, but this week, dollar strength and rising bond yields have reduced its appeal, making it harder for gold to gain upward momentum.

In other precious metals, silver prices rose slightly by 0.5% to $82.68 per ounce, while platinum increased 0.7% to $2,134.76 per ounce.

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