Gold prices fell at the close of trading on Friday, on the back of rising oil prices due to escalating tensions between the US and Iran, posting a weekly loss as concerns of a resurgence of inflationary pressures grew and expectations for continued tightening of US monetary policy were confirmed.
The decline came as the International Energy Agency warned that the recent escalation between the United States and Iran could undermine hopes of a large oil market surplus next year and increase pressure on energy markets and inflation.
Markets are currently pricing in about a 69% chance that the U.S. Federal Reserve will raise interest rates at its September meeting, according to CME Feedwatch, but the minutes of the U.S. central bank’s June meeting have a hawkish tone amid persistent inflation concerns.
In the physical market, gold traded at a deep discount in India during the week, while demand stabilized in China after China’s central bank announced June’s largest monthly increase in gold reserves in more than two-and-a-half years.
After settlement, gold futures for August delivery fell 0.65%, or $27.10, to close at $4,113.70 per ounce, marking a weekly loss of 0.29%. Silver futures for July delivery also fell 0.94%, or $0.569, to settle at $59.809 per ounce.
