Gold Heads for Weekly Drop as Safe-Haven Demand Starts to Ease

Gold headed for a weekly drop as a slight easing of geopolitical tensions in the Middle East sapped haven demand and a Federal Reserve inflation warning raised the prospect of fewer rate cuts.

Bullion traded around $3,370 an ounce Friday, on pace for a 1.8% weekly decline. US President Donald Trump signaled he would give diplomacy a chance before deciding whether to strike Iran, dialing back on recent comments that suggested military action could be imminent. The shift in tone reduced fears of imminent action that could escalate hostilities, threaten energy flows and spur inflation.