Gold headed into Friday near $4,113 an ounce, on course for a weekly decline of roughly 1.5% even as renewed U.S.-Iran strikes raised the risk of further escalation. Safe-haven demand competed with higher oil prices and a 63% implied chance of a September Fed rate increase, leaving bullion caught between two opposing forces.
Gold entered Friday near $4,113 an ounce, with August COMEX futures around $4,122, and remained on course for a weekly decline of roughly 1.5%. Renewed U.S.-Iran strikes increased the risk of further escalation, yet the muted response captured the market's central conflict: investors had reason to retain protection through the weekend, while higher oil prices and tighter rate expectations limited any upside.
Oil turned into the key transmission channel
The link between gold and the conflict turned counterintuitive. When Trump declared the interim memorandum of understanding with Iran "over" and U.S. strikes resumed, crude surged. Brent settled at $78.02 per barrel on Wednesday, up 5.2%, while WTI rose 4.4% to $73.52. The oil surge reinforced inflation concerns and lifted expectations of tighter Fed policy, pressuring gold.
As a result, the market-implied probability of a September Fed rate increase climbed to 63%, from 54% one week earlier, according to the CME FedWatch Tool. Higher rates raise the opportunity cost of holding gold, which pays no income. Some traders bought protection against a weekend event, while others limited exposure because another strike could push oil higher and strengthen the case for tighter policy.
Where the chart sits now
The near-term structure held below the 20-day exponential moving average near $4,149, the level FXStreet identifies as the first barrier. The daily picture shows a rebound from the June 30 low after a sharp late-June correction from the $4,205 area toward $3,942.
Momentum stayed soft. The RSI near 40 placed it below the neutral 50 line while remaining above the oversold threshold of 30, and the MACD line stayed below zero with a narrowing histogram. Buyers still need a close above resistance to shift the structure.
What decides the next move
Gold's path after Friday's close depends on whether the next development strengthens safe-haven demand or instead sends oil, yields, and the dollar higher. A contained strike that mainly lifts oil could pressure bullion by reinforcing the rate-hike narrative, though an initial safe-haven bid can come first. A broader escalation threatening regional stability could do the opposite and lift gold.
No escalation would remove part of the weekend premium and return focus to the June CPI print, scheduled by the BLS for Tuesday, July 14, at 8:30 a.m. ET.
Source: Investing.com
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