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According to a Reuters report on July 17, spot gold climbed 0.3 percent to $3,980.64 per ounce in morning trade after earlier touching its lowest level since July 1. U.S. gold futures for August delivery slipped 0.2 percent to $3,984.10 an ounce. The metal has declined 3.4 percent for the week, its largest drop since the start of June.
Escalating clashes between the U.S. and Iran have lifted oil prices by about 12 percent so far this week, the agency said, with limited flows through the Strait of Hormuz and Houthi threats to Red Sea routes adding to supply concerns. This energy surge has reignited inflation worries that outweigh the impact of softer U.S. inflation readings for June. Higher oil costs strengthen the argument for elevated interest rates, which typically pressure gold as a non-yielding asset.
Reuters noted that the CME FedWatch Tool now prices in a 73 percent chance of a U.S. interest rate increase in December. Dallas Fed President Lorie Logan advocated for modestly higher rates while Fed Vice Chair Philip Jefferson expressed willingness to consider hikes absent near-term inflation relief. Such hawkish signals from policymakers have contributed to the precious metal’s weekly retreat.
The report showed that other precious metals were similarly headed for losses over the period. Spot silver fell 0.6 percent to $55.20 per ounce, platinum declined 1.1 percent to $1,599.17 and palladium eased 0.4 percent to $1,244.16. These moves reflect the shared influence of geopolitical developments and shifting rate expectations across the complex.
Tim Waterer, chief market analyst at KCM Trade, told Reuters, “Even with tamer CPI and PPI figures, the oil price spike this week meant traders simply couldn’t celebrate the cooler inflation numbers.” He added that geopolitical risks in the Middle East are still present, with inflation and yield concerns being the dominant forces holding gold back. Waterer’s commentary highlights how energy market volatility has overshadowed disinflationary data.
Trading Economics figures indicate gold has dropped more than 5 percent over the past month while retaining year-to-date gains exceeding 19 percent. The platform’s analysis links the recent pressure to sustained Middle East tensions that have simultaneously elevated oil and tempered rate-cut prospects. Investors remain attentive to further escalations that could alter safe-haven demand dynamics in coming sessions.
