Spot gold was up 0.6% at $4,262.39 per ounce after ​hitting a seven-week high on Thursday

Gold prices ‌firmed on Friday and were on track for their biggest weekly gain since January, helped by weaker oil prices.

Spot gold was up 0.6% at $4,262.39 per ounce, as of 0421 GMT after ​hitting a seven-week high on Thursday. Prices were up over 5% ⁠for the week.

Hopes of peace in the Middle East ​saw inflation expectations drop, allowing gold to surge higher from a multi-week consolidation above $4,000, said ​Matt Simpson, a senior analyst at StoneX.

U.S. president told reporters that he believed the war with Iran would be over soon and said the armed forces were experiencing issues with supplies of ​some weapons.

Crude oil prices were headed for a weekly loss. Lower energy prices help ​ease inflation concerns and reduce expectations of higher-for-longer interest rates. Gold is an inflation hedge, but higher ‌interest ⁠rates tend to weigh on its appeal as it offers no yield.

The U.S. Labor Department’s nonfarm payrolls report for July is due at 1230 GMT.

Regardless of how NFP plays out, $4,000 has proven to be a solid support level – and I suspect bulls are waiting ​for dips to take ​advantage of a ⁠much-needed correction higher towards $4,600. NFP may provide some noise over the near term, but price action has spoken, and gold looks like ​it wants to rally, Simpson added.

Traders currently see a 55% ​chance of ⁠a U.S. rate hike in September, from 63% a week ago, per the CME FedWatch Tool.

Going into August, we are somewhat friendlier towards gold and expect a wider trading band to ⁠set ​in, Marex said in a monthly note.