Gold prices rose slightly on Friday after posting significant losses in the previous session, trading near the key level of $4,000. The yellow metal is currently poised to resume its decline, heading toward support levels of $3,953 then $3,902. On the upside, if the price manages to stay above $4,000 level, it could rise toward resistance levels near $4,085 then $4,140.
The escalation of geopolitical tensions in the Middle East remained the dominant driver of global financial markets on Friday after Qatar announced that it had thwarted an Iranian missile attack, and growing threats to disrupt shipping through the Red Sea pushed oil prices higher. Meanwhile, the U.S. Dollar Index headed for a weekly decline as investors balanced geopolitical risks against expectations for the Federal Reserve’s next policy moves, with markets closely monitoring incoming economic data for further direction.
Market Watch
Qatar Thwarts Iranian Missile Attack on the Country
Qatar’s Ministry of Defense announced that its air defense systems successfully intercepted and thwarted an Iranian missile attack targeting the country, amid the ongoing military escalation between Iran and the United States in the Gulf region. Qatari authorities stated that the missiles were intercepted before reaching their intended targets, with no significant damage reported as a result of the operation.
The attack was part of a broader wave of Iranian strikes targeting several U.S.-allied countries in the Gulf. Reports indicated that Bahrain and Kuwait were also subjected to missile and drone attacks, as tensions continue to rise following U.S. military operations against targets inside Iran.
Following the attack, Qatari authorities emphasized that the security situation remains under control and affirmed the readiness of the armed forces to respond to any further threats. Meanwhile, the Ministry of Foreign Affairs called for de-escalation and a return to diplomatic efforts to preserve regional peace and stability. Several Gulf states also condemned the Iranian attacks, expressing solidarity with Qatar and rejecting any actions that threaten the security of the Gulf region.
The latest developments have heightened concerns over a broader regional conflict in the Middle East, fueling uncertainty in global energy markets and maritime trade through the Gulf, while the international community continues to warn of the economic and geopolitical consequences of further escalation.
Oil Prices Rise Amid Threats to Close the Red Sea
Oil prices climbed during Friday’s trading session as concerns grew over potential disruptions to global energy supplies following escalating threats to close the Red Sea, one of the world’s most critical maritime routes for transporting crude oil, natural gas, and commercial goods. The rising geopolitical tensions increased the risk premium in energy markets, prompting investors to buy crude oil futures.
The gains came after warnings that the ongoing military escalation in the Middle East could disrupt shipping through the Red Sea and the Bab el-Mandeb Strait, a vital chokepoint for energy exports from the Gulf to Europe and Asia. Market analysts believe that any prolonged disruption to this strategic waterway would lead to higher shipping and insurance costs while putting additional pressure on global supply chains.
Oil prices also found further support from concerns over tightening supplies amid continued tensions between Iran and the United States. Investors remain focused on the possibility that any disruption to tanker traffic could reduce crude exports and tighten global oil markets, while closely monitoring military and diplomatic developments to assess their impact on the balance between supply and demand.
Market participants expect oil prices to remain highly sensitive to geopolitical developments in the coming days, as any further escalation or actual disruption to maritime traffic in the Red Sea could drive crude prices even higher amid persistent uncertainty surrounding the global energy market.
U.S. Dollar Index Heads for Weekly Decline
The U.S. Dollar Index (DXY) was on track to post a weekly decline during Friday’s trading session as demand for the greenback weakened amid improving risk sentiment and investor caution ahead of key economic data that could provide further guidance on the Federal Reserve’s monetary policy outlook.
The dollar came under pressure despite ongoing geopolitical uncertainty in the Middle East, as market participants focused on upcoming U.S. economic indicators, particularly data on economic activity and the labor market, for clearer signals regarding the timing and pace of potential interest rate cuts by the Federal Reserve.
Meanwhile, major currencies, including the euro and the British pound, gained modestly against the U.S. dollar, while U.S. Treasury yields remained relatively stable following volatility earlier in the week. Analysts noted that any signs of slowing U.S. economic growth or easing inflationary pressures could increase downward pressure on the dollar in the coming weeks.
Investors are also closely monitoring geopolitical developments in the Middle East alongside incoming U.S. economic data, as both factors are expected to play a key role in shaping the direction of the U.S. dollar and broader global financial markets in the days ahead.