Gold Prices Plunge Amid U.S.–Iran Tensions and Fed Rate-Hike Expectations

Spot gold fell sharply in late June 2026 as fresh U.S.–Iran strikes in the Gulf lifted crude prices and heightened expectations that the U.S. Federal Reserve will raise interest rates. On June 29, spot gold traded around $4,020 per ounce, a 1.7 % drop from the previous day, and by June 30 it had slipped to $4,009 per ounce, putting the metal on track for its steepest quarterly decline since 2013 and its largest monthly loss since October 2008.

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Iran launched missiles and drones at U.S. installations in Kuwait and Bahrain on the weekend of June 27, following President Donald Trump’s warning that Tehran would face severe consequences if it failed to honor a peace-agreement framework. The attacks prompted a brief surge in Brent crude futures and renewed concerns about oil-driven inflation. Within hours, diplomatic channels reported a tentative pause in hostilities and a resumption of talks over the Strait of Hormuz.

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• Spot gold fell 0.2 % to $4,008.94/oz on June 30, after a 0.6 % decline to $4,062.89/oz on June 29.

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• U.S. gold futures for August delivery dropped 0.4 % to $4,022.70/oz.

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• The metal is on track for a fourth consecutive monthly loss of roughly 10 %–11 % (sources report 10.4 % and 11.3 %).

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• Silver fell 0.8 % to $58.26/oz; platinum slipped 0.7 % to $1,564/oz; palladium rose modestly.

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• CME FedWatch Tool shows a 60 %–80 % probability of a Fed rate hike by September, with an 80 % chance of a December increase.

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Analysts linked the gold slide to both the oil price spike and the prospect of a “higher-for-longer” Fed stance. Peter Grant of Zaner Metals noted that markets remain “attuned to Middle East headlines” and are adjusting to a more hawkish monetary outlook. Marex analyst Edward Meir warned that “the markets are a little uneasy about how stable theMOUis and there’s pressure on gold because people are not seeing much light at the end of the tunnel.” Tim Waterer of KCM Trade emphasized that renewed U.S.–Iran hostilities “cast further doubt over how long oil can stay at these subdued levels and therefore over the broader inflation and interest-rate outlook.” An OMFIF survey cited in the reports indicated that central banks may reduce U.S. dollar exposure while modestly increasing gold holdings in the near term.

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Some market participants argue that the traditional safe-haven demand for gold is being outweighed by inflation-driven rate-hike expectations. The same analysts describe a “pressure on gold” and a lack of “light at the end of the tunnel,” reflecting skepticism that higher rates will subside soon enough to revive bullion demand.

Gold prices fall 0.69 percent to $4,053 as oil surge, Fed rate hike bets weigh on bullion

• “The market is attuned to Middle East headlines, (with) some uptick in tensions over the weekend and still adjusting to a more hawkish Fed tilt,” — Peter Grant, Vice President and Senior Metals Strategist, Zaner Metals

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• “(Gold) could edge to new lows if the employment data still looks pretty strong, that supports the higher-for-longer Fed stance,” — Peter Grant, Zaner Metals

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• “The markets are a little uneasy about how stable theMOUis and there's pressure on gold because people are not seeing much light at the end of the tunnel,” — Edward Meir, Marex Analyst

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• “U.S. and Iran were at it again over the weekend, with fresh military strikes reported from both parties, which casts further doubt over how long oil can stay at these subdued levels and therefore over the broader inflation and interest rate outlook,” — Tim Waterer, Chief Market Analyst, KCM Trade

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• “Gold could see the $5,000 level again this year but this would be based on further de-escalation, oil having a sustained move to pre-war levels to dull the inflationary impact of the conflict, and a softer dollar,” — Tim Waterer, KCM Trade

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Sources differ on the exact spot-gold price (ranging from $4,008.94 to $4,062.89 per ounce) and on the magnitude of the monthly decline (10.4 % vs. 11.3 %). Probability estimates for a September Fed hike vary between 60 % and 65 %, while the December hike probability is reported as 80 % in one source and not mentioned in others. No source provides definitive data on central-bank buying volumes for the period.

Gold prices fall 0.69 percent to $4,053 as oil surge, Fed rate hike bets weigh on bullion

Traders await the ADP private-employment report and the U.S. nonfarm payrolls data later this week for clues on labor-market strength. Those releases will influence expectations for the Fed’s policy path, including the likelihood of additional rate hikes before year-end. Market participants will also monitor any further developments in the U.S.–Iran confrontation, which could again affect oil prices and, by extension, gold’s trajectory.

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