Gold Prices Fall as $100 Oil Rises Amid Escalating Middle East Tensions
Gold prices fell on Friday despite escalating tensions in the Middle East and rising oil costs. Brent crude surged above $100 a barrel, its strongest close in two months, after Houthi attacks on two Saudi oil tankers in the Red Sea.
The rally followed President Donald Trump's warning of further military retaliation against Iran and its allies, raising concerns about disruption to global energy flows at key routes such as Bab el-Mandeb and the Strait of Hormuz.
Gold's decline came despite the metal typically serving as a safe-haven asset during times of conflict. However, it often struggles in the short run when investors expect central banks to respond with higher interest rates.
The Federal Reserve meets on July 28-29 and is widely expected to leave rates unchanged. Markets are pricing about a one-third chance of an immediate increase, while at least one move is already anticipated by September as oil pushes inflation expectations higher.