Gold steadies as traders assess rates path after US-Iran clashes
Published Mon, Jul 20, 2026 · 09:35 AM
[SINGAPORE] Gold steadied after the US and Iran ramped up attacks over the weekend, as traders assess the likelihood of the Federal Reserve raising interest rates to contain inflation.
Bullion was trading around US$4,010 an ounce, after sliding more than 2 per cent last week.
Benchmark Brent crude jumped to above US$90 a barrel after the escalation of hostilities in the Middle East, including an attack on a vital oil facility in Kuwait and the targeting of ships attempting to transit through the Strait of Hormuz.
Teheran said the ceasefire between the US and Iran has been effectively abandoned, raising the possibility of deepening disruptions to crucial energy flows through the narrow waterway.
The Iran conflict, now in its fifth month, is again driving up energy and commodity prices from fuel to raw materials used in manufacturing and food production.
US President Donald Trump has been silent about his Iran strategy as the tension escalates, making the endgame on the either side of the conflict as unclear as ever.
Elevated energy prices have raised some concerns that the Fed may eventually tighten monetary policy, even as soft US economic data suggest a rate hike is not likely in the near term.
Higher borrowing costs are a headwind for non-yielding bullion. Gold has hovered in a narrow range around US$4,000 in recent weeks after losing 14 per cent in the second quarter – its worst showing since 2013.
“Gold is showing a relatively muted reaction to the spike in oil prices, which to me reflects some investor apathy around geopolitics” and instead increases focus on the Fed’s rates decision, said Justin Lin, an analyst at Global X ETFs.
“Yields are only marginally higher over the weekend despite the significant escalation in the Middle East, which is probably why gold has been quite stable,” said Lin.
Bank of Cleveland president Beth Hammack in a LinkedIn post on Friday joined a growing chorus of Fed officials in expressing concern over high inflation.
Swap traders have priced in at least one hike by the end of 2026.
Spot gold was 0.2 per cent lower at US$4,010.81 an ounce as of 9.01 am in Singapore.
Silver rose 1.1 per cent to US$56.59 an ounce. Platinum and palladium declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat. BLOOMBERG
