Although gold prices increased on the last trading day of the week, they continue to suffer strong losses on a weekly basis. The tension between the USA and Iran pushed oil prices up, increasing inflation concerns and causing investors to reconsider their interest rate expectations.
The ounce price of spot gold increased by 0.3 percent to $3,990. An ounce of gold, which tested its lowest level since July 1 during the day, nevertheless lost 3.2 percent of its value throughout the week, preparing for its steepest weekly decline since June 1.
Domestically, gram gold is traded at 6 thousand 50 lira with an increase of 0.5 percent.
KCM Trade Chief Market Analyst Tim Waterer stated that although the US consumer and producer inflation data for June were below expectations, the sharp rise in oil prices prevented the formation of a positive atmosphere in the markets.
Waterer emphasized that geopolitical risks in the Middle East continue and stated that concerns about inflation and bond yields continue to put pressure on gold prices.
Concerns that the flow of oil through the Strait of Hormuz may be restricted after the renewed tension between the USA and Iran and Tehran's request from the Houthis to be ready to close the Red Sea export route caused oil prices to rise approximately 12 percent this week.
The expectation that the rise in oil prices could accelerate inflation again has also increased the possibility of an interest rate increase by the US Federal Reserve (Fed).
Gold, which does not earn interest, remains under pressure in a high interest rate environment as investors turn to assets that offer interest income. After Dallas Fed President Lorie Logan called for an interest rate increase, Fed Vice President Philip Jefferson said that they are open to an interest rate increase if there is no improvement in inflation in the short term.
According to CME FedWatch data in money markets, investors price the possibility of the Fed to increase interest rates in December as 73 percent.