Gold prices managed a modest advance on Friday, rising 0.16% to trade near $4,055 an ounce, even as a stronger U.S. dollar and firm Treasury yields capped gains. The precious metal steadied after Thursday's selloff, supported by ongoing geopolitical tensions and elevated crude oil prices that kept inflation concerns alive.
Spot silver also gained, climbing 1.35% to around $58.31 an ounce, recovering above its 50-period moving average near $58.22. However, it remained below the $58.56 to $59.94 resistance zone identified in recent technical analysis.
Labor data limits dovish expectations
Market sentiment shifted after stronger-than-expected U.S. labor data tempered the dovish outlook that softer inflation readings had earlier fueled. Initial jobless claims fell by 22,000 to 187,000 for the week ended July 18, the lowest level since September 1969, reinforcing the view that layoffs remain historically low.
The 10-year Treasury yield hovered near 4.70%, while the U.S. dollar index (DXY) stood around 101.39. These headwinds limited gold's upside, though the metal remained above Thursday's lows. It traded in an early range of $4,021.20 to $4,064.90, staying below the $4,067 and $4,139 resistance levels highlighted in the latest technical setup.
ECB holds rates steady
In Europe, the European Central Bank kept its deposit rate unchanged at 2.25%, with the main refinancing rate at 2.40% and the marginal lending rate at 2.65%. The ECB reiterated its focus on the intensity and duration of the energy-price shock, a stance that contributed to a broadly cautious tone across markets.
Meanwhile, the dollar steadied near 101.40 as traders weighed new U.S. tariffs and Middle East tensions, adding to the complex backdrop for gold.
Geopolitical risks and oil prices
The situation around the Strait of Hormuz remained highly stressed, with transit described as open but under active military and shipping pressure. U.S.-Iran tensions continued to focus on control of the waterway, while Houthi attacks on Saudi tankers in the Red Sea expanded shipping risks and complicated Gulf export routes.
Brent crude oil eased to roughly $97.67 a barrel after climbing above $102, while U.S. crude traded near $89.76. The decline from recent highs did not remove the energy-risk premium from markets. For gold, the impact was mixed: geopolitical risks supported defensive demand, but elevated oil prices also kept inflation risks higher, which can support Treasury yields.
Earlier this week, gold slid below $4,070 as an oil rally fueled inflation fears and boosted yields, illustrating the delicate balance between safe-haven demand and rate expectations.
Outlook
Market participants are now watching Federal Reserve communication ahead of the July 29 policy decision. Together, these factors left gold and silver higher on Friday, though the path forward remains clouded by competing forces of geopolitical uncertainty and tightening financial conditions.
This article is for informational purposes only and does not constitute financial advice.
