Gold Pressured by Middle East Tensions

Gold traded below $4,100 an ounce on Thursday after falling for a second consecutive session, pressured by concerns that the renewed conflict in the Middle East could disrupt energy supplies from the region and intensify inflationary pressures. The US military confirmed it carried out strikes on Iran for a second straight day in an effort to curb Tehran’s ability to threaten navigation through the Strait of Hormuz, while Iran vowed a large-scale retaliatory operation against US military bases in the region. President Donald Trump said that, in his view, the ceasefire is over and warned of additional strikes on Iran along with a new blockade. Meanwhile, minutes from the Federal Reserve’s June meeting showed that only a few policymakers favored a rate increase, though officials expressed growing concern about inflation. Markets continue to price in at least one Fed rate hike by the end of 2026.

Gold decreased 2% to 4023.55 USD/t.oz

Gold extended its decline to around $4,030 an ounce on Wednesday, touching its lowest level since July 2 after US President Donald Trump declared the interim peace agreement with Iran "over." His remarks sent oil prices surging more than 5%, fueling concerns that higher energy costs could stoke inflation and keep US interest rates elevated. Speaking at NATO's summit in Ankara, Trump said he had no interest in further engagement with Iran and warned that Washington would likely carry out additional strikes later on Wednesday. His comments marked another sharp shift in a conflict where rhetoric from both the US and Iran has repeatedly oscillated between military escalation and diplomatic overtures. Markets are now pricing in at least one Federal Reserve interest rate hike by the end of 2026. Meanwhile, China's central bank reported its largest monthly increase in gold reserves in more than two and a half years in June, underscoring continued official-sector demand for the precious metal.