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Reuters reported that spot gold advanced 0.5 percent to $3,988.20 per ounce in morning trade on Friday after touching its lowest level since July 1. U.S. gold futures for August delivery remained unchanged at $3,992 an ounce. The precious metal has shed 3.2 percent for the week, marking its sharpest drop since June 1.
The ongoing escalation in the Middle East has seen Iran and the United States exchange strikes, unraveling a recent truce, the report noted. Oil prices have climbed about 12 percent this week on fears of disrupted supplies through the Strait of Hormuz and the Red Sea. Such developments have heightened inflation risks that could prompt the Federal Reserve to raise rates.
Dallas Federal Reserve President Lorie Logan was the first among recent appointees to publicly advocate for a rate increase, Reuters said. Fed Vice Chair Philip Jefferson indicated openness to tightening policy if inflation does not ease soon. Traders now assign a 73 percent probability to a rate hike by December according to CME FedWatch Tool data.
KCM Trade chief market analyst Tim Waterer said, “Even with tamer CPI and PPI figures, the oil price spike this week meant traders simply couldn’t celebrate the cooler inflation numbers.” He added that geopolitical risks in the Middle East remain present with inflation and yield concerns dominating. This combination has kept gold under pressure despite softer U.S. inflation data released earlier in the week.
In related metals trading, spot silver declined 0.5 percent to $55.22 per ounce while platinum fell 0.7 percent to $1,605.62 and palladium eased 0.4 percent to $1,244.86, the report showed. All three industrial precious metals were similarly set for weekly losses. The moves reflect broader market caution amid geopolitical and monetary policy uncertainties.
Market assessments indicate gold has declined more than 20 percent since the Iran conflict intensified in February 2026, according to Bloomberg compilations. HSBC analysts adjusted their 2026 average gold price forecast downward in response to sustained higher rate expectations and a stronger dollar. The metal reached record highs above $5,000 earlier in the year before the recent reversal.
