Gold Set for Weekly Loss

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.

Gold fell toward $4,000 an ounce on Thursday, resuming its decline as escalating attacks in the Middle East pushed oil prices sharply higher this week, reviving concerns about inflation and the outlook for interest rates. The US carried out additional strikes against Iranian targets on Wednesday, though President Donald Trump said Tehran had signaled a willingness to resume negotiations. Meanwhile, the precious metal found some support from softer US inflation data, which eased concerns over a near-term Federal Reserve rate hike. Data released on Wednesday showed US producer prices unexpectedly declined in June for the first time in nearly a year, largely due to lower energy costs, following Tuesday’s weaker-than-expected consumer inflation report. However, June’s inflation figures did not reflect the impact of the latest escalation in the US-Iran conflict, as the interim peace agreement reached last month has effectively unraveled.