Gold Prices Slip but Remain on Track for Weekly Gain

Gold prices moved lower on Friday but remained positioned to end a two-week losing streak.

Persistent tensions in the Middle East continued to support safe-haven demand. However, expectations that U.S. interest rates could remain elevated placed pressure on the precious metal.

At 02:14 ET, spot gold fell 0.5% to $4,030.55 per ounce, while U.S. gold futures declined 0.4% to $4,032.75.

Silver prices dropped 0.4% to $57.42 per ounce, while platinum declined 0.7% to $1,585.43.

Gold Heads for Its First Weekly Gain in Three Weeks

Gold was relatively stable after losing almost 2% during the previous session.

Despite the daily decline, bullion had gained approximately 0.8% for the week. This placed gold on course for its first weekly increase in three weeks.

Geopolitical uncertainty helped limit losses, although rising Treasury yields and a stronger U.S. dollar reduced the appeal of non-yielding assets.

Middle East Tensions Support Safe-Haven Demand

Conflict in the Middle East intensified after Yemen’s Iran-aligned Houthi movement attacked two Saudi oil tankers in the Red Sea.

U.S. President Donald Trump warned that Washington would hold Iran responsible for future Houthi attacks on commercial shipping. He also threatened further military action against Tehran.

The geopolitical outlook remained uncertain after reports indicated that Iran had rejected a U.S.-supported ceasefire proposal.

The development reduced expectations of a near-term de-escalation, even as diplomatic negotiations continued.

Higher Oil Prices Renew Inflation Concerns

The latest escalation pushed oil prices higher, raising concerns about renewed inflationary pressure.

Stronger-than-expected U.S. labor market data also increased speculation that the Federal Reserve could maintain restrictive monetary policy for longer.

Initial jobless claims unexpectedly fell to 187,000, reaching their lowest level in decades.

The strong employment data pushed the benchmark 10-year U.S. Treasury yield to its highest point since January 2025.

Markets Assess Risk of a Fed Rate Increase

Financial markets were pricing an approximately 34% probability of a quarter-point interest rate increase at the Federal Reserve’s upcoming meeting.

Higher energy prices and resilient labor market figures have strengthened concerns that inflation may remain above the central bank’s preferred level.

Nomura analysts nevertheless expect the Federal Reserve to keep interest rates unchanged.

They also believe Fed Chair Kevin Warsh may provide limited guidance because the July meeting will not include updated economic forecasts or an interest rate dot plot.

Stronger Dollar and Treasury Yields Pressure Gold

Tony Sycamore, a senior market analyst at IG, said gold’s decline reflected pressure from higher Treasury yields and a stronger U.S. dollar.

Weaker risk sentiment following the latest Middle East developments also influenced the market.

The U.S. Dollar Index remained close to 101.45 after advancing in the previous session.

Because gold does not offer interest payments, rising bond yields can make the metal less attractive compared with income-generating assets.

Gold Technical Outlook Remains Constructive

Despite the latest pullback, gold’s broader technical structure remained relatively positive.

Sycamore said the metal appeared to be forming a base above its late-June low of approximately $3,942 per ounce.

This level remains an important area of support for the current bullish outlook.

A sustained rise above the early-July high of $4,202 could strengthen positive momentum.

Such a breakout could open the way for a recovery toward the 200-day moving average near $4,495.

Fed Decision and Geopolitical Risks Remain Key

IG maintained a cautiously bullish outlook while gold remained above its late-June support level.

However, the metal’s short-term direction will likely depend on the Federal Reserve’s next policy decision.

Further developments in the Middle East, energy prices, Treasury yields and the U.S. dollar could also determine whether gold extends its weekly recovery.