WASHINGTON (dpa-AFX) - Gold prices have edged higher on Friday, partially offsetting the losses from yesterday's plunge after crude oil prices plummeted, lowering both oil-linked inflation concerns and the consequential expectations of an interest-rate hike by the U.S. Federal Reserve.
Front Month Comex Gold for August month delivery has inched higher by $19.00 (or 0.47%) to $4,069.20 per troy ounce.
Front Month Comex Silver for August month delivery has also soared by $0.792 (or 1.37%) to $58.650 per troy ounce.
The Memorandum of Understanding signed between the U.S. and Iran on June 17 extended the ceasefire and offered scope for restoring stability in the Middle East, which has been heavily disturbed since the U.S. began attacking Iran on February 28.
However, after a few weeks when Iran began firing at ships traveling across the Strait of Hormuz, U.S. forces recommenced attacks on Iran, restarting the war. The Iranian military has continued to target several U.S. bases across the gulf region in response.
U.S. concluded its 13th consecutive night of strikes on Iran on Thursday following a series of threats by U.S. President Donald Trump to the Iranian government.
Vowing to inflict severe damage, Trump warned that for every single strike on any ship transiting the Strait of Hormuz, one bridge or a power plant in Iran will be destroyed by U.S. forces, if required even closer to Iran's capital.
After the Iran-backed Houthi militant group in Yemen attacked two Saudi Arabian vessels transiting in the Red Sea, Trump warned that any further attack by Houthi group would invite a major military punishment by the U.S. on Iran. Trump termed the rebel group a proxy of Iran.
In an interview with Axios late Thursday, Trump stated that he is planning a massive attack on Iran that would be bigger than before. In a veiled threat, Trump observed that Iran has not received enough pain yet.
Today, Iran's Mehr News Agency reported that the Iranian army launched a new wave of drone attacks on U.S. military installations in Jordan, Kuwait, and Bahrain. The Islamic Revolutionary Guards Corps also targeted an Amazon data center in Bahrain.
Through Truth Social, Trump announced that the U.S. would start utilizing Iran's frozen assets in foreign nations as compensation for the damages to ships and cargo by Iranian attacks. However, he did not specify how the collection would be implemented and which incidents would qualify for damage compensation.
In the absence of an official estimate, media speculates that the total value of Iranian assets worldwide would amount to anywhere between $100 billion and $123 billion.
Heavily criticizing Trump's plans, Iran's Foreign Minister Abbas Araghchi stated that seizing a country's assets to pay for unrelated future claims is an incendiary precedent. Araghchi counter-warned that the ensuing chaos would not be pretty or peaceful.
In the middle of escalating tensions, the number of ships crossing the Strait of Hormuz has declined day by day and dropped to only one on Thursday, according to Reuters data.
Today, crude oil prices plunged by more than 3.50% as investors resorted to profit booking from five consecutive sessions of gains.
In addition, the Organization of Petroleum Exporting Countries are likely to boost output for September. Experts are concerned that once shipping traffic resumes, OPEC's decision could lead to a surplus in oil markets.
Yesterday in the U.S., data released by the Department of Labor revealed that unemployment benefit claims sank by 22,000 to 187,000 for the week of July 18.
Amid inflation concerns and a resilient labor market, economists are of the view that the U.S. Federal Reserve could raise interest rates at its next week meeting.
While investors preferred to wait and watch how the Middle East situation unfolds in the coming days, gold received safe-haven support.
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