The dollar eased on Friday, lifting gold to a one-week high. A weaker greenback makes dollar-denominated bullion cheaper for holders of other currencies, providing a direct tailwind to spot prices.
Crude retreated after President Trump said the U.S. would not strike Iran before next month's midterms, with diplomatic efforts to end the conflict continuing. Cooler energy prices temper inflation expectations, supporting gold's appeal.
St. Louis Fed President Musalem signaled further tightening may still be needed to reach the 2% inflation target. FedWatch shows an 80%+ probability of at least one 25bp hike by December, capping gold's upside.
Gold caught a bid on dollar weakness and easing oil-driven inflation fears, but the Federal Reserve's tightening bias remains the key ceiling. Expect range-bound trade near $4,100–$4,200 in the near term, with any dovish Fed shift or fresh geopolitical escalation as the next upside catalyst.