Gold holds decline as Mideast tensions bolster rate hike case
Strategist says ‘softer reading’ of inflation prints due this week to give bullion traders ‘relief’
Published Wed, Sep 9, 2026 · 08:46 AM
[SINGAPORE] Gold held a three-day decline, as fresh attacks on ships in the Middle East added to inflationary risks and raised prospects for a US interest rate hike.
Bullion was little changed near US$4,350 an ounce, having dropped 2.6 per cent over the last three sessions. US forces destroyed five Iranian tankers carrying crude near Kharg Island, the Islamic Republic’s main oil export hub, in response to attempted missile attacks on an American warship.
That raised fears of an escalation in the months-long war and spooked energy markets.
Oil extended gains, with benchmark Brent crude close to US$100 a barrel. That is adding momentum to the case for a rate hike less than a week before the US Federal Reserve’s Sep 14 to 15 meeting.
Traders are eyeing key inflation prints due this week for fresh clues to the central bank’s next move.
“A softer reading will be a relief for gold traders” as it would support the case for holding rates steady, said Ahmad Assiri, a market strategist at Pepperstone Group.
“The greater risk lies in an upside inflation surprise, which would likely strengthen the case for a hike, creating what could be massive pressure on the precious metal,” he added.
Tighter monetary policy is typically a headwind for gold, which does not pay interest. Swaps traders are pricing in a roughly 60 per cent chance of a Fed rate increase in September.
Since bouncing from a floor near US$4,000 an ounce in July, gold has settled in a relatively narrow range either side of US$4,400, as traders repeatedly recalibrate the outlook for Fed policy.
Despite near-term headwinds, many investors are still betting that bullion will grind higher as it rediscovers its traditional value as a portfolio hedge.
“For now, gold’s low-volatility consolidation around US$4,400 appears more like a market waiting for clarity to decide where to go next,” Assiri said.
“The consumer price index outcome could provide the needed catalyst for the next meaningful move.”
Spot gold edged down 0.1 per cent to US$4,352.14 an ounce at 7.16 am in Singapore. Silver slipped 0.2 per cent to US$65.63 an ounce. Platinum was flat, while palladium fell. The Bloomberg Dollar Spot Index, a gauge of the US currency, was 0.1 per cent lower. BLOOMBERG
