Gold prices hovered around $4,050 per ounce on Friday, stabilizing after a nearly 2% drop in the previous session, as a sharp rise in oil prices amid escalating tensions in the Middle East reinforced expectations for tighter US monetary policy. President Donald Trump warned of expanded military action against Iran and pledged to hold Tehran responsible for any further Houthi attacks on commercial vessels in the Red Sea, helping push Brent crude above $100 a barrel for the first time since May. The jump in oil prices heightened inflation concerns, strengthening bets on additional Fed tightening and weighing on non-yielding assets such as gold. Futures markets now imply a 34% chance of a Fed rate hike next week, while the probability of a September increase has risen above 78%. At the same time, newly imposed US tariffs of 10%–12.5% on imports from key trading partners have added to market uncertainty. Despite the recent volatility, gold remains on track for a modest weekly gain.