Gold Slides Amid Signs of Easing US-China Trade Tensions

Gold remained below $4,000 an ounce on Friday and was down more than 3% for the week, as escalating US-Iran tensions drove oil prices higher, fueling inflation concerns and strengthening expectations that the Federal Reserve will keep interest rates elevated. Geopolitical tensions intensified after Tehran launched fresh strikes on US facilities in the Middle East, following a sixth consecutive night of US attacks on Iranian military targets that continued to disrupt traffic through the Strait of Hormuz. Fed officials also reinforced the hawkish outlook. Dallas Fed President Lorie Logan called for another rate hike, while Vice Chair Philip Jefferson said he would support tighter policy if inflation failed to improve in the near term. Markets are now pricing in roughly a 50% chance of a September rate increase. On the data front, US consumer and producer prices both declined in June, largely due to lower energy costs, while import prices unexpectedly rose.

Gold held below $4,000 an ounce on Friday and was on track to lose more than 3% for the week, as escalating tensions in the Middle East pushed oil prices higher, keeping inflationary pressures and interest rate concerns at the forefront. The US launched multiple strikes against Iran this week, while President Donald Trump warned that the US could target the country's infrastructure next week unless diplomatic efforts result in a breakthrough. Iran responded by launching attacks on US bases in neighboring countries, fueling fears of further escalation and a prolonged disruption to energy supplies from the region. Meanwhile, softer-than-expected US inflation data released this week has largely ruled out a July rate increase, even as Fed Chair Kevin Warsh reiterated his commitment to restoring price stability. However, markets remain divided on whether the Fed will hike rates in September, keeping the non-yielding gold under pressure.

Gold prices fell toward $4,000 an ounce on Thursday, approaching their lowest level since November 2025, as escalating tensions in the Middle East drove oil prices higher and reinforced concerns that interest rates could remain elevated. The latest escalation followed fresh US strikes on Iranian military targets and Tehran's retaliation against US bases in neighboring countries, raising concerns over the security of the Strait of Hormuz and pushing crude oil prices to one-month highs. Higher energy prices have strengthened expectations that the Federal Reserve may need to keep monetary policy tighter for longer, reducing the appeal of non-yielding gold. Traders currently see about a 51% chance of a September rate hike. Meanwhile, softer-than-expected US inflation data released this week has largely ruled out a July increase, even as Fed Chair Kevin Warsh reaffirmed his commitment to bringing inflation under control.