Gold and Silver Rally from Heavy ETF Outflows Across First Week of Middle East War

GOLD and SILVER rallied late-Friday in London as a shock drop in US jobs data followed heavy selling by investors in New York's largest bullion-backed ETF trust funds despite the worsening death and destruction in the Middle East.

Western stock markets slumped again, knocking 3.6% off the MSCI World Index over this first week of the war, while crude oil leapt through $90 per barrel of Brent, hitting 2-year highs almost 25% above last Friday's finish.

Gold fixed at 3pm around $5130 per Troy ounce in London, up 2.6% from Tuesday's spot gold price slump to $5000 and failing to set a new week-end record for only the 3rd time in ten Fridays so far this year.

Silver had earlier fixed at London's midday auction around $82.40 per Troy ounce, down 8.4% from last Friday's benchmark − and 20.0% below end-January's record-high Friday finish for silver − as its largest exchange-traded fund the iShares Silver Trust (NYSEArca: SLV) showed net liquidation of 1.1% for the week to last night.

But the more industrially-useful precious metal then jumped near $85 as gold surged to $5170 after that shock US jobs data showed a net drop in employment for February.

The giant SPDR Gold Trust (NYSEArca: GLD) ended Thursday 2.3% smaller than last Friday, shrinking to the smallest since mid-February to need just less than 1,076 tonnes of bullion backing.

That 25-tonne outflow put the GLD gold ETF on track for its sharpest weekly liquidation since the start of July 2022.

Today's US jobs data said that non-farm payrolls went into last weekend's US-Israeli airstrikes against Iran with a monthly drop of 92,000.

Contrasting badly with consensus forecasts for a rise of 59,000, that edged the unemployment rate backup to 4.4%, a post-pandemic high when reached last September.

Betting that the US Fed won't cut interest rates until July eased back after the jobs data, but it still put the odds of 'no change' over the next 3 meetings of the US central bank at 62% according to the CME derivatives exchange's FedWatch tool.

Back in the Middle East, gold prices in Dubai are running $30 per ounce below London quotes, Bloomberg reports, as flights into and out of the region's key bullion transit hub re-open gradually and only through "emergency" corridors.

Gold flows into the precious metal's No.2 consumer nation India "will obviously be the main issue," says a note from analyst Rhona O'Connell at brokerage StoneX, estimating that perhaps 2,000 tonnes of gold per year go through Dubai to supply the sub-continent and the Middle East as well as scrap flows to refineries in Switzerland.

"Singapore would be a viable alternative [for Indian importers] and there are early signs of some interest in sourcing from there, but nothing significant as yet," says O'Connell.

As it is, gold prices are also running at $30 discounts in India, Reuters reports, as the spring wedding season finds weak demand in the face of high prices plus large dealer stockpiles built in advance.

Gold in China, in contrast, this week averaged around $30 per ounce above London quotes, marking the largest Shanghai gold premium since May last year and suggesting strong demand in the precious metal's No.1 mining, importing and consumer nation.

Gold ETFs in India last month saw the equivalent of $560 million in inflows, taking net growth so far in 2026 to almost $20 billion according to MoneyControl.