Gold prices advanced again on Friday as heightened geopolitical uncertainty in the Middle East continued to support demand for safe-haven assets ahead of the closely watched US nonfarm payrolls report. Investors also remained focused on expectations for the Federal Reserve’s next interest rate decision.
At 01:04 ET (05:04 GMT), spot gold (XAU/USD) climbed 0.6% to $4,264.22 an ounce, while gold futures rose 0.6% to $4,323.07. Silver (XAG/USD) gained 1.2% to $62.26 an ounce, and platinum (XPT/USD) added 0.6% to $1,740.05.
Strait of Hormuz Tensions Boost Safe-Haven Demand
Iranian state media reported that the country had targeted what it called “hostile targets” in the Strait of Hormuz and intended to block US and Israeli vessels from using the strategically important shipping route.
The reports followed comments from Iranian officials that negotiations with Oman aimed at restoring maritime traffic were nearing completion.
Meanwhile, Yemen’s Houthi movement claimed responsibility for a major attack against Saudi-backed government forces, raising fears that instability could spread further across the Middle East.
Despite the latest developments, US President Donald Trump said he expected the conflict to end “pretty soon” and insisted that the United States remained in control of the Strait of Hormuz.
Gold briefly traded above $4,300 during Thursday’s session before retreating as renewed concerns over rising energy prices revived expectations that inflation could remain elevated and prompt the Federal Reserve to maintain a restrictive monetary policy.
Following a Financial Times report that Federal Reserve Chair Kevin Warsh is prepared to raise interest rates if inflation remains high, markets are now pricing in roughly a 60% chance of a September rate increase.
The US Dollar Index remained close to the 100 level, offering limited direction for precious metals.
US Employment Data May Determine Gold’s Next Move
Attention is now turning to the release of the July nonfarm payrolls report, which could reshape expectations for future US monetary policy.
St. Louis Federal Reserve President Alberto Musalem warned that policymakers cannot allow inflation to remain elevated while waiting for productivity gains to reduce price pressures.
At the same time, continued investment demand from China has supported bullion. Gold-backed exchange-traded funds in China have now recorded 14 consecutive trading sessions of net inflows.
Tony Sycamore, Senior Market Analyst at IG, said the recent breakout suggests gold has established a base near the late-June low of approximately $3,942.
He believes that holding above this level would strengthen the case for a move toward the 200-day moving average near $4,489. A sustained break above that resistance could pave the way for a broader rally towards the $5,000 level.
Sycamore added that Friday’s US payrolls figures are likely to determine whether the current rally gains further momentum or begins to fade.
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