Gold prices fell on Thursday as the
escalating Middle East conflict showed no signs of abating,
erasing recent optimism over easing inflation and fuelling
concerns that surging oil prices could lead to interest rate
hikes.
Spot gold was down 0.6% at $4,034.42 per ounce by 0349
GMT. U.S. gold futures for August delivery lost 0.3% to
$4,039.90.
“Gold is declining as the escalating attacks in the Middle
East continue to push oil prices sharply higher this week,
keeping concerns about inflation alive,” said Jigar Trivedi, a
senior research analyst at IndusInd Securities.
Oil prices extended gains to a fourth session as the U.S.
launched two waves of attacks on Iran’s coastal defences and
missile sites after re-imposing a naval blockade of its ports.
Iran struck back by targeting U.S. military sites in
neighboring countries in what it called an “existential war”
with America.
“June’s inflation figures did not reflect the impact of the
latest escalation in the U.S.-Iran conflict, as the interim
peace union reached last month has effectively unravelled,”
Trivedi added.
U.S. consumer and producer inflation slowed in June, amid a
pullback in the cost of energy products, reinforcing evidence
that inflation was subsiding before the recent escalation in the
Middle East conflict.
The moderation was, however, not enough to convince
financial markets to rule out a Federal Reserve interest rate
hike this year.
Traders are still pricing an about 73% chance of a December
Fed rate hike, CME FedWatch Tool’s data showed.
Fed Governor Lisa Cook said on Wednesday she is “prepared to
act” if inflation does not soon begin to slow.
Fed Chairman Kevin Warsh also declared his determination to
bring inflation down without hinting at how.
Investors are now looking out for remarks from Dallas Fed
President Lorie Logan and Fed Vice Chair Philip Jefferson due to
speak later today.
Elsewhere, spot silver fell 1.1% to $57.14 per ounce.
Platinum eased 0.6% to $1,664 and palladium edged
0.3% lower to $1,309.86.
Published on July 16, 2026
