Gold steady as traders watch Middle East war for inflation clues

Published Tue, Jul 21, 2026 · 09:24 AM

[SINGAPORE] Gold was steady as traders monitored a raft of developments in the Middle East conflict for clues on the energy price impact on inflation.

Bullion continued to trade in a narrow range around US$4,000 an ounce after ending the previous session down 0.2 per cent.

Oil was little changed after two days of gains, even after US forces launched a fresh round of strikes on Iranian targets and US President Donald Trump vowed Teheran “will pay” for killing three US soldiers in recent days. 

Yemen’s Iran-backed Houthi rebel group has entered the fray, vowing to impose a maritime blockade on Saudi Arabia, prompting a military coalition led by the kingdom to say it had taken steps to protect vessels sailing the Red Sea.

Despite the escalation, Iran said mediators were in touch with proposals on how to ease hostilities after more than a week of worsening clashes, and Reuters reported a proposal for a 10-day cessation of strikes. 

The conflict, now in its fifth month, is again driving up prices of commodities used in manufacturing and food production.

Traders are left to weigh higher energy prices and the prospect of the Federal Reserve raising interest rates against soft US economic data. Elevated borrowing costs are a headwind for non-yielding bullion.

The Fed is set to announce its rates decision at a meeting next week, along with other clues. Gold traders are unlikely to do much before then, said Alexandra Symeonidi, an analyst at William Blair International.

Swap traders see low odds of a rate rise at the meeting, but have fully priced in at least one hike by the end of 2026.

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“Hawkish Fed is the biggest factor now,” she said. 

Spot gold was little changed at US$4,008.83 an ounce as of 8.11 am in Singapore.

Silver was 0.2 per cent lower at US$56.31 an ounce. Platinum and palladium were stable. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat. BLOOMBERG