Gold declined on Friday following a 2% drop in the previous session, as Brent crude’s rise above $100 a barrel heightened inflation worries and bolstered the argument for increasing interest rates. Spot gold declined by 0.1% to $4,042.77 per ounce as of 0110, reflecting a decrease of over $120 from the two-week high reached on Wednesday. U.S. gold futures for August delivery experienced a decline of 0.1%, settling at $4,045.60. Bullion was on track for a modest weekly gain of 0.6%.

U.S. President Donald Trump declared on Thursday that there would be “major military punishment” for Iran and its Houthi allies, following the attack by Yemeni fighters on two Saudi oil tankers in the Red Sea. Brent crude jumped 7% on Thursday, surpassing $100 a barrel for the first time since May, marking one of the sharpest increases since the war began. The dollar appreciated alongside U.S. Treasury yields, with benchmark 10-year yields reaching their highest level since January 2025. The U.S. Federal Reserve is widely anticipated to maintain current interest rates in the upcoming week, although market participants are assigning approximately an 81% probability of an increase in September, as indicated by the CME FedWatch Tool.

The European Central Bank maintained interest rates at their current level as anticipated on Thursday, while signalling the possibility of a further increase in September. Elevated interest rates diminish the attractiveness of non-yielding gold. Thailand’s central bank has put forth a proposal to impose cash payment limits on physical gold bar transactions at gold shops. This initiative aims to enhance transparency and oversight in transactions that may influence exchange rates. Newmont, the largest gold mining company globally, surpassed profit expectations for the second quarter on Thursday, as a surge in gold prices more than compensated for the effects of reduced production.

Azerbaijan’s sovereign oil fund SOFAZ maintained its total gold holdings at 178.1 metric tonnes during the second quarter. African Rainbow Minerals announced that its board has sanctioned a phased upgrade of its Bokoni platinum group metal operations, amounting to 15.2 billion rand, equivalent to $927.28 million. Additionally, the company will resume nickel mining at Nkomati. Spot silver decreased by 0.2% to $57.56 per ounce, while platinum experienced a decline of 0.5% to $1,592.97, and palladium saw a drop of 0.8% to $1,246.72.