Gold prices fell on Friday, on track for a weekly decline on concerns that escalating U.S.-Iran tensions could fuel inflation and keep the U.S. Federal Reserve on a hawkish monetary policy path.

Spot gold was down 0.5% at $4,101.23 U.S. an ounce, and headed a more than 1% weekly decline. U.S. gold futures for August delivery dropped 0.65% to $4,113.50.

Oil prices were on track for a weekly gain, as U.S. and Iran continued to trade strikes, with Iranian armed forces launching attacks on U.S. military infrastructure in Gulf states on Thursday following U.S. strikes on Iran’s southern coastal and eastern provinces.

The latest round of strikes has fueled inflation concerns and reinforced the probability of the U.S. Federal Reserve raising interest rates this year. Markets are pricing in a 64% chance of a September rake hike from around 54% a week before.

HSBC cut its average gold price forecasts for 2026 and 2027 on Thursday, citing a hawkish shift in U.S. monetary policy expectations and a stronger dollar.

Elsewhere, spot silver rose 0.8% to $60.46 U.S. per ounce, platinum gained 1.6% to $1,636.68 U.S. and palladium added 1.6% to $1,267 U.S.. All three metals were on track for a weekly loss.

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