Gold Price Gains: Bullion Rises To $4,550 Despite Turkey's 60-Ton Sell-Off Shock

Gold prices jumped back above $4,500 an ounce in New York on Friday, putting the metal on course for its first weekly gain since the Iran war erupted in late February, even as a surprise 60‑tonne sell‑off by Turkey's central bank jolted bullion markets.

The news came after a brutal few weeks for gold, which had been sliding almost in lockstep with equities since the US‑Israeli military campaign in Iran began on 28 February. Instead of behaving like the traditional haven investors reach for in crises, Mining.com reported that bullion has been trading more like a high‑beta risk asset, knocked around by surging oil prices and resurgent fears of higher US interest rates.

Gold's Strange Role In A War‑Shaken Market

The latest rally followed one of the sharpest pullbacks in years. As the conflict escalated, oil prices climbed and traders rushed to reprice the odds of further Federal Reserve rate hikes. Higher borrowing costs are typically poison for gold, which yields nothing and becomes less attractive compared with interest‑bearing assets.

By Friday, however, bargain hunters appeared to decide the sell‑off had gone far enough. Spot gold climbed as much as 4.1 per cent intraday to top $4,550 an ounce, erasing the previous session's slump. It was last up 3.2 per cent at $4,515.26 at 3:58 p.m. in New York trading, according to market data.

The rebound does not mean the market is relaxed. Analysts at TD Securities argued in a note that gold is now 'trading as a risk asset,' moving largely in tandem with stocks and in the opposite direction to oil. Since the war began, the metal has lost nearly 15 per cent of its value, a remarkable performance for something still widely marketed as a crisis hedge.

The geopolitical backdrop has only grown darker. The US and Israel have struck Iranian nuclear and steel facilities, while Iran has launched retaliatory attacks across the Persian Gulf. Hopes for any quick ceasefire have faded. President Donald Trump's pledge to refrain, for 10 days, from targeting Iran's energy infrastructure briefly eased nerves and offered a 'slight respite for gold,' but the underlying tensions have not gone away.

The war has also choked one of the world's most critical trade arteries. The Strait of Hormuz, a narrow channel through which about a fifth of global oil and gas flows each day, along with significant volumes of food, metals and other raw materials, is described as being 'largely closed' to traffic as the conflict approaches the one‑month mark. That bottleneck has layered a supply shock on top of already fragile energy markets.

Turkey's Gold Fire Sale Rattles Central Bank Assumptions

If the war has scrambled gold's role in private portfolios, it is doing something similar in official ones. Over the last two years, heavy central‑bank buying has been one of the key pillars underpinning bullion's historic rally. Many monetary authorities, particularly in emerging markets, were seen as reliable, long‑term accumulators of gold, diversifying away from the dollar.

That assumption took a hit after it emerged that Turkey's central bank had sold and swapped about 60 tonnes of gold over a two‑week period, a move worth more than $8 billion at current prices. For a market used to seeing central banks only on the buy side, the signal was unsettling.

If other institutions follow Ankara's lead, the pace of official sector purchases would inevitably slow. More importantly, it would chip away at the belief that central banks are reluctant to part with gold once it is in their vaults.

Daniel Ghali, senior commodity strategist at TD Securities, suggested Turkey may not be an outlier. 'This conflict happens to result in pretty significant economic damage for Middle Eastern nations, who have been some of the participants participating in the official sector gold purchases,' he said. In his view, what Turkey has done is 'probably a more prevalent trend across energy‑import nations.'

The logic is brutal but straightforward. The economic shock from the war in Iran is squeezing countries that import large quantities of fuel. As dollar‑denominated obligations mount and foreign‑exchange reserves come under pressure, some central banks may have little choice but to tap their gold holdings for liquidity. Others that had been steadily adding to reserves could simply pause or drop out of the market.

Ghali warned that demand for gold from certain central banks is likely to be dented, while a subset may be 'forced to sell' to meet commitments. For investors who had come to treat official buying as a structural tailwind, that is a meaningful shift.

The cross‑currents are not limited to gold. Silver gained 2.7 per cent on Friday to trade just under $70 an ounce, while platinum and palladium also advanced. The Bloomberg Dollar Spot Index, which tracks the US currency against major peers, rose 0.2 per cent after a 0.4 per cent climb in the previous session, reinforcing the sense of a market cautiously tilting back towards safety.

Nothing about this realignment is settled. If the conflict widens, or if the Strait of Hormuz remains constricted for months rather than weeks, assumptions about inflation, interest rates and safe havens will shift again. For now, gold has wrestled back some ground, but it is doing so in a world where old rules about who buys it, and why, suddenly look much less certain.