Gold Steadies as Soft US Inflation and Iran War Risks Cloud Fed Rate Outlook
Gold prices stabilized near US$4,060 per ounce on Thursday as traders weighed softer-than-expected US producer price inflation data against escalating military conflict with Iran. The Bloomberg Dollar Spot Index and Treasury yields fell after June PPI showed inflationary pressures easing, though the data did not reflect the latest hostilities. An interim peace deal signed in June has collapsed, with the US launching airstrikes for a fifth consecutive day and President Trump pledging to intensify bombardment until Tehran stops attacking ships and reopens the Strait of Hormuz. Gold had lost 14% in Q2 2026, its worst quarter since 2013, driven by expectations the US Fed might hike rates to manage war-induced inflation. Fed Chairman Kevin Warsh indicated rates remain an option to keep inflation at the 2% target but showed willingness to be patient. Oil prices rose for a fourth consecutive day amid the renewed conflict.
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