TLDR
- Gold fell 0.5% Friday to $4,030 but is on track for its first weekly gain in three weeks
- Yemen’s Houthis attacked two Saudi oil tankers, raising Middle East tensions and oil prices
- Strong U.S. jobs data pushed 10-year Treasury yields to their highest since January 2025
- Markets are pricing a 34% chance of a Fed rate hike at next week’s meeting
- Analysts say gold needs to break above $4,202 to signal a stronger recovery
Gold prices dipped on Friday but are still set to close the week in positive territory, ending a two-week losing streak. Prices fell 0.5% to around $4,030 an ounce in early trading.
Despite the daily drop, gold has gained about 0.8% this week. That makes it the first weekly advance in three weeks for the metal.
The week’s gains were driven largely by rising tensions in the Middle East. Yemen’s Houthi rebels, aligned with Iran, attacked two Saudi oil tankers in the Red Sea.
🇾🇪 Insurance costs for shipping through the southern Red Sea doubled in a single day.
The jump came after Houthi forces hit at least one tanker overnight, with some companies now paying twice what they paid yesterday.
War risk premiums are the fastest signal in this whole… pic.twitter.com/w7OG07YfWT
— Mario Nawfal (@MarioNawfal) July 23, 2026
President Donald Trump responded by warning that the U.S. would hold Iran responsible for future Houthi attacks on commercial shipping. He also threatened further military action against Tehran.
The New York Times reported that Iran rejected a U.S.-backed ceasefire proposal. That news reduced hopes for a near-term resolution to the conflict.
Fed Rate Fears Add Pressure
The conflict pushed oil prices higher, which added to existing inflation worries. Those worries were made worse by strong U.S. labor market data released this week.
Initial jobless claims fell unexpectedly to 187,000, the lowest level in decades. That sent the 10-year Treasury yield to its highest point since January 2025.
Higher yields are negative for gold because the metal pays no interest. When bonds offer better returns, gold becomes less attractive to investors.
Markets are now pricing roughly a 34% probability of a quarter-point rate hike at next week’s Federal Reserve meeting. That is up from earlier expectations following the strong jobs report.
Analysts at Nomura expect the Fed to hold rates steady. They noted that Fed Chair Kevin Warsh is unlikely to give strong forward guidance at the July meeting, as there will be no updated economic projections.
Technical Picture Still Cautious
Senior market analyst Tony Sycamore at IG said the daily decline reflected pressure from higher Treasury yields, a stronger U.S. dollar, and weaker risk sentiment.
The U.S. Dollar Index held near 101.45, keeping pressure on gold. A stronger dollar makes gold more expensive for buyers using other currencies.
Sycamore said gold is still showing signs of forming a base above the late-June low of $3,942. That level is seen as key short-term support.
A move above $4,202 would strengthen the bullish case and could open the door to a move toward $4,495, near the 200-day moving average.
Capital Economics analyst Thomas Ryan said if inflation stays persistent, the Fed could begin tightening with a 25-basis-point hike in September. That move is now fully priced in by markets following oil’s rebound above $90 a barrel.
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