Gold Prices Steady Amid Middle East Risks and Higher Oil Prices

Gold prices steadied on Friday after a nearly 2% drop in the previous session as investors assessed the Middle East risks and their impact on energy-driven inflation. The precious metal was trading around $4,050 per ounce, showing little change from Thursday's levels.

The higher oil prices, driven by concerns over Gulf supply disruptions, have reinforced expectations that interest rates could remain higher for longer, reducing gold's appeal due to its non-yielding nature.

Investors are now awaiting next week's Federal Reserve meeting, where a rate hike is widely expected to be kept unchanged. However, markets still price in an approximately 80% chance of a hike in September.

In the meantime, the European Central Bank maintained its interest rates on Thursday and left the door open for a potential increase in September.