Gold prices edged higher on Friday, with spot gold climbing 1% to settle at $4,017.23 per ounce and gold futures adding 0.8% to $4,022.40 per ounce. Despite the daily gains, the weekly trajectory turned negative: spot gold was down 2.5% for the week and gold futures slipped 2.2%. The decline was driven by renewed oil‑driven inflation concerns that outweighed softer U.S. price data.
U.S. inflation indicators showed moderation in June, as the headline Consumer Price Index (CPI) and Producer Price Index (PPI) both eased on a month‑over‑month basis, while gasoline station retail sales fell. The University of Michigan survey reported that July consumer sentiment reached its highest level since February and that year‑ahead inflation expectations declined, offering a brief window of relief for the Federal Reserve.
Nevertheless, Federal Reserve officials reiterated concerns about persistent price pressures. Chair Kevin Warsh, Governor Christopher Waller, New York Fed President John Williams, and Dallas Fed President Lorie Logan all emphasized that inflation remains too high to justify easing monetary policy, with Logan specifically calling for “modestly higher” interest rates. Neil Welsh, head of metals at Britannia Global Markets, noted that the softer CPI and PPI data initially buoyed sentiment, but the hawkish remarks suggest borrowing costs may stay elevated, weighing on non‑yielding assets such as gold.
In parallel, oil markets surged amid escalating tensions in the Middle East. Brent crude futures were on track for a weekly gain of more than 15%, while crude oil (LCO) rose 4.63% and gold futures (GC) increased 0.77% during the same period. Iran launched a fresh barrage of air attacks on U.S. facilities after American forces struck Iranian military sites. U.S. Central Command reported the conclusion of a sixth consecutive night of strikes aimed at degrading Iranian capabilities and holding Tehran accountable for attacks on commercial shipping. Iranian media said the U.S. strikes also hit civilian infrastructure, including five bridges and a railway station.
The heightened conflict has revived uncertainty around the Strait of Hormuz, disrupting tanker traffic and dampening hopes that a fragile ceasefire would restore smooth flows. The combination of rising oil prices, persistent inflation worries, and geopolitical risk has left gold on pace for its biggest weekly decline in over a month.