Gold holds near two-week high as oil surge lifts September Fed hike odds
Bullion slipped toward $4,050 after a nearly 2% drop, while Brent moved above $100 a barrel and markets increased bets on tighter Fed policy amid U.S.-Iran tensions and tariff uncertainty.
Gold hovered around $4,050 an ounce on Friday after a nearly 2% drop in the previous session, giving back ground from a recent move to $4,165.87, its highest since July 7. Brent crude climbed above $100 a barrel for the first time since May as President Donald Trump warned of expanded military action against Iran and said Tehran would be held accountable for any future Houthi attacks on commercial vessels in the Red Sea. The jump in oil prices intensified inflation concerns and lifted expectations for tighter Federal Reserve policy, pressuring non-yielding bullion. Markets now assign a 34% probability of a Fed rate hike next week, while the odds of a September increase have climbed above 78%. Fresh U.S. tariffs of 10%-12.5% on imports from major trading partners added to the uncertain backdrop, though gold remains on track for a modest weekly gain.
- Brent crude: A global oil benchmark widely used to price international crude supplies.
- non-yielding: Describes an asset such as gold that does not pay interest or dividends.
- Fed rate hike: An increase in the Federal Reserve's benchmark interest rate, which can affect borrowing costs and asset prices.