Key TakeawaysThe precious metal declined 0.5% on Friday, settling around $4,030 per ounce, yet remains poised for a weekly advanceHouthi forces from Yemen struck two Saudi oil tankers, escalating regional conflict and boosting crude pricesRobust employment figures in the U.S. drove 10-year Treasury rates to levels not seen since early 2025Traders are assigning a 34% probability to a Federal Reserve rate increase at the upcoming policy meetingTechnical observers note gold must climb beyond $4,202 to confirm a more robust upward trendThe yellow metal experienced a modest retreat on Friday yet remains positioned to finish the week with gains, snapping a two-week decline. Trading saw the commodity fall half a percent to approximately $4,030 per ounce during morning sessions.Gold Aug 26 (GC=F)While Friday brought downward pressure, the weekly performance shows an approximate 0.8% increase. This marks the first time in three weeks that gold has posted a positive weekly result.The week’s upward momentum stemmed primarily from escalating regional instability in the Middle East. Houthi militants from Yemen, who maintain ties with Iran, launched strikes against two Saudi oil vessels navigating the Red Sea. Insurance costs for shipping through the southern Red Sea doubled in a single day.The jump came after Houthi forces hit at least one tanker overnight, with some companies now paying twice what they paid yesterday.War risk premiums are the fastest signal in this whole… pic.twitter.com/w7OG07YfWT— Mario Nawfal (@MarioNawfal) July 23, 2026President Donald Trump issued a stern warning, stating the United States would hold Iran accountable for any subsequent Houthi assaults on commercial maritime traffic. He additionally threatened expanded military operations targeting Tehran.Reporting from The New York Times indicated Iran dismissed a ceasefire plan backed by Washington. This development diminished expectations for a swift diplomatic solution to regional hostilities.Interest Rate Concerns Weigh on SentimentThe regional turmoil drove oil prices upward, compounding pre-existing concerns about inflation. These anxieties intensified following surprisingly robust employment statistics released during the week.New jobless claims dropped unexpectedly to 187,000, reaching the lowest reading in multiple decades. This propelled the 10-year Treasury rate to its peak level since January 2025.Rising rates present a headwind for gold since the commodity generates no yield. When fixed-income instruments deliver superior returns, investor appetite for the precious metal typically diminishes.Market participants now estimate approximately a 34% likelihood that the Federal Reserve will implement a 25-basis-point rate increase during next week’s policy gathering. This probability has risen following the encouraging employment figures.Nomura’s research team anticipates the central bank will maintain current policy settings. They observed that Fed Chair Kevin Warsh is unlikely to provide definitive forward guidance during the July session, given the absence of refreshed economic forecasts.Chart Analysis Suggests Caution RemainsTony Sycamore, a senior market analyst with IG, attributed Friday’s weakness to mounting Treasury rates, dollar strength, and diminished appetite for riskier assets.The U.S. Dollar Index maintained its position near 101.45, continuing to constrain gold values. Dollar appreciation increases the cost of gold for international purchasers using alternative currencies.According to Sycamore, the metal continues to display characteristics of establishing a floor above the late-June trough of $3,942. Market participants view this level as critical near-term support.A breakout above $4,202 would reinforce the bullish outlook and potentially clear the path toward $4,495, positioned near the 200-day moving average.Thomas Ryan, an analyst with Capital Economics, suggested that persistent inflation could prompt the Fed to initiate tightening with a 25-basis-point increase in September. Market pricing now fully reflects this scenario following crude oil’s rally above $90 per barrel.The post Gold Prices Slip Friday Yet Secure Weekly Gains as Fed Decision Looms appeared first on Blockonomi.