Brent Crude Tops $100 on Red Sea Tensions as Rising Yields Temper Gold Rally
Surging oil prices and higher U.S. Treasury yields are reshaping commodity markets, pressuring gold while highlighting the geopolitical risk premium for global investors.
Brent crude surged 7 percent on Thursday, breaking above $100 a barrel for the first time since May. This spike followed U.S. President Donald Trump’s promise of major military punishment for Iran and its Houthi allies after Yemeni fighters struck two Saudi oil tankers in the Red Sea.
The resulting flight to the dollar and higher U.S. Treasury yields have cooled the precious metals market. Benchmark 10-year yields climbed to their highest level since January 2025, pushing spot gold down 0.1 percent to $4,042.77 per ounce.
Prices have now retreated more than $120 from a two-week high reached on Wednesday. Despite the daily dip, bullion remains on track for a modest weekly gain of 0.6 percent, with August futures edging 0.1 percent lower to $4,045.60.
Higher bullion prices continue to support major producers despite operational headwinds. Newmont, the world's biggest gold miner, reported second-quarter profits that beat estimates, as the price rally offset the impact of lower output.
Broader precious metals faced similar pressure, with spot silver falling 0.2 percent to $57.56 an ounce. Platinum and palladium also declined, dropping 0.5 percent to $1,592.97 and 0.8 percent to $1,246.72, respectively.
In corporate developments, African Rainbow Minerals approved a phased 15.2 billion rand ($927.28 million) upgrade to its Bokoni platinum operations and the resumption of nickel mining at Nkomati. Meanwhile, Azerbaijan’s sovereign oil fund SOFAZ held its gold reserves steady at 178.1 metric tons in the second quarter.
In Asia, Thailand’s central bank is moving to tighten oversight of the precious metals market. The bank proposed cash payment limits for physical gold bar trades at local shops to improve transparency and mitigate potential impacts on the national exchange rate.
Investors now face a heavy slate of macroeconomic data, including flash purchasing managers indices from Japan, the UK, the European Union and the United States. These readings will test whether persistent inflation and geopolitical shocks continue to dictate central bank policy and asset allocation.
