Oil Shock Triggers Hawkish Fed Outlook, Weighs on Gold's Price

Gold's price closed the week at $4,055.70 per troy ounce on Friday, marking a 0.08 percent daily gain and a 0.86 percent weekly advance.

This may seem like a positive development for gold investors, but it masks a growing tension in the market.

The culprit behind this tension is crude oil, which breached $100 a barrel for the first time since May due to President Trump's warning of expanded military action against Iran.

Rising oil prices are fueling inflation fears, which in turn reinforce expectations that the Federal Reserve will keep monetary policy tight for longer.

This hawkish Fed outlook is a direct headwind for gold investors, as it reduces the likelihood of rate cuts and increases the risk of higher interest rates.