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ConflictGold falls over 1% below $4,070 as renewed US-Iran strikes fuel rate-hike bets
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Gold prices declined sharply on Monday, July 13, 2026, falling as much as 1.2% to below US$4,070 an ounce, following renewed military strikes between the US and Iran over the weekend of July 11-12. The escalation in the Middle East, particularly confusion over the status of the Strait of Hormuz, raised concerns that the US Federal Reserve may need to keep interest rates higher for longer to combat stubborn inflation. Minutes from the Fed's June meeting, released the prior week, showed a few policymakers saw a case for raising rates, though they ultimately voted to hold steady. Higher borrowing costs are typically negative for gold, which does not pay interest. Gold has lost more than a fifth of its value since the Iran war began in late February, ending a three-year bull run. Hedge funds and money managers trimmed bullish bets on gold to 114,854 contracts for the week ended July 7. Spot gold was at US$4,070.98, while silver, platinum, and palladium also fell.
Source report
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. PHOTO: REUTERS
Gold declined after the US and Iran exchanged strikes over the weekend of July 11 and 12, sending energy prices higher and once more raising the prospects for interest-rate hikes to combat inflation.
Bullion fell as much as 1.2% to below US$4,070 an ounce on Monday (July 13), having lost 1.4% in the week ended July 12.
Strait of Hormuz Status in Question
Confusion governed the status of energy transit via the Strait of Hormuz, with the US denying an earlier statement by Iran that the waterway would be closed "until further notice." American forces started attacks to ensure freedom of navigation, according to US Central Command.
Fed Rate-Hike Concerns
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 gold, which does not pay interest.
Key Events Ahead
The latest tensions arrive before Kevin Warsh makes his first appearance before the US Congress as Fed chairman on July 14. The House Financial Services Committee hearing in Washington will be preceded by June consumer price figures from the US Bureau of Labor Statistics.
Gold Performance Since Iran Conflict
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. Hedge funds and money managers trimmed bullish bets on gold to 114,854 contracts for the week ended July 7, weekly CFTC data on futures and options showed on July 10.
Market Data
- Spot gold: Dropped 1.2% to US$4,070.98 an ounce at 7:05 am in Singapore
- Silver: Slumped 2.1% to US$58.64 an ounce
- Platinum and palladium: Also fell
- Bloomberg Dollar Spot Index: Rose 0.2%
Source: BLOOMBERG
SEE ALSO:
- Trump says Strait of Hormuz open to commercial traffic
- Oil jumps as Iran and US trade strikes, dispute Hormuz status
- Prepare for a perilous summer in markets
Keywords: Gold, Silver, Precious Metals
Source
The Business TimesWestern
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