Gold posts weekly gain as US-Iran war pushes oil past $100

Gold ended the week higher as the escalating military conflict between the United States and Iran sent crude oil prices above $100 per barrel for the first time since May, driving investors toward safe-haven assets even as the stronger dollar and rising rate-hike expectations capped gains.

War Premium Lifts Commodities

Brent crude surpassed $100 per barrel on Thursday, according to The New York Times, as disruptions to energy supplies through the Strait of Hormuz and Red Sea intensified. U.S. WTI crude hovered near $93 per barrel, with both benchmarks reflecting a nearly 40 percent increase since the onset of the conflict.nytimes

Gold headed for a modest weekly gain despite trading lower on Friday. Spot gold slipped below $4,030 per ounce in international markets, while on the MCX Multi Commodity Exchange of India Limited, gold futures for August delivery fell 0.31 percent to around Rs 1,42,376 per 10 grams on Friday after opening lower. Silver futures for September delivery also declined, dropping as much as 1 percent to hit Rs 2,17,325 per kg during the session. Despite Friday's pullback, both metals posted weekly gains as geopolitical risk premiums remained elevated.india+1

Escalation Shows No Signs of Abating

The US-Iran conflict has entered what analysts at RBC Capital Markets described as "a decidedly more dangerous phase". Iran attacked US bases in Kuwait and Bahrain on Friday, while the US has conducted 11 consecutive nights of airstrikes targeting Iranian military infrastructure. President Trump stated this week that the US is "not finished at all", while Iran has declared the June memorandum of understanding invalid.understandingwar+4

CNN Warner Bros. Discovery, Inc. ↗ 0.03% reported that the conflict now "closely resembles full-scale warfare," with neither side appearing willing to engage in renewed negotiations.cnn

Inflation Fears Counter Safe-Haven Demand

The oil-driven inflation surge has complicated gold's safe-haven rally. Markets now assign a 34 percent probability to a Federal Reserve rate hike next week, with September hike odds climbing above 78 percent. The stronger dollar weighed on precious metals Friday, even as the underlying geopolitical risk continued to support prices on a weekly basis. Analysts warn that a "full regional war" could push oil to $150 per barrel, which would likely intensify the competing forces acting on gold markets.goodreturns+1