Gold and silver drop as fresh US-Iran strikes heighten Fed rate-hike risks
Minutes of the Fed’s June meeting showed a few policymakers saw a case for raising rates
Published Mon, Jul 13, 2026 · 08:25 AM — Updated Mon, Jul 13, 2026 · 12:11 PM
GOLD and silver tumbled after the US and Iran exchanged fresh strikes over the weekend of Jul 11 and 12, sending energy prices higher and once more raising the prospects for US interest-rate hikes to combat inflation.
Spot gold slid as much as 1.6 per cent to near US$4,050 an ounce, having lost 1.4 per cent in the week ended Jul 12.
Confusion governed the status of the Strait of Hormuz, with the US denying a statement by Iran that the waterway would be closed “until further notice.” American forces made a fourth round of strikes in a week in response to an attack on a container ship, Central Command said.
For gold traders, the escalation of fighting in the Middle East raises concerns that the US Federal Reserve may need to keep interest rates higher for longer to combat stubborn inflation. Minutes of the Fed’s June meeting released last week showed a few policymakers saw a case for raising rates, though they ultimately backed the decision to keep them steady.
More generally, the minutes reflected growing concern among US central bank officials over inflation just as worries over the labour market receded slightly. Higher borrowing costs are typically a headwind for precious metals, which do not pay interest. Silver fell as much as 3.1 per cent on Monday.
“Renewed geopolitical tension has sent another shockwave through an already fragile gold market,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “Unless the fighting around Hormuz meaningfully settles and turns a new page for precious metals, elevated oil prices, firmer yields and a stronger dollar could keep gold pinned under pressure this week,” she said.
Gold is down by more than a fifth since the Iran war started in late February, with a wave of profit-taking ending a three-year bull run and briefly pushing the metal below US$4,000 for the first time since November 2025.
The yield on the rate-sensitive two-year Treasury note climbed to the highest since February 2025 and a gauge of the dollar gained, making metals priced in the US currency more expensive for most buyers.
The latest pressure on gold comes as Kevin Warsh prepares to make his first appearance before the US Congress as US Fed chairman. The House Financial Services Committee hearing on Jul 14 in Washington will be preceded by June consumer price figures from the US Bureau of Labor Statistics.
Spot gold dropped 1.5 per cent to US$4,058.18 an ounce at 11.34 am in Singapore. Silver slid 2.9 per cent to US$58.11 an ounce. Platinum and palladium also fell, while the Bloomberg Dollar Spot Index was up 0.2 per cent. BLOOMBERG
