Gold experienced a significant decline on July 8, 2026, falling by as much as 1.6% below $4,050 per ounce, marking its third consecutive day of losses. This downturn was primarily triggered by US President Donald Trump's announcement in Ankara that the ceasefire with Iran had "ended," labeling it a "waste of time." The renewed US attacks against Iran and the revocation of an exemption for Iranian oil sales, in retaliation for Iranian attacks on merchant ships in the Strait of Hormuz, led to a surge in oil prices, intensifying fears of persistent inflation.
Spot gold dropped 1.3% to $4,054.53 per ounce, while silver saw a 2% decrease, settling at $58.77 per ounce. The probability of a Federal Reserve rate hike surged to over 30% from less than 20% the previous week. The new Fed Chairman, Kevin Warsh, has adopted a more aggressive stance on interest rates, further impacting gold prices. Higher financing costs typically hinder gold's appeal as it is a non-interest-generating asset, and the strengthening US dollar makes it more expensive for international buyers.
According to Ewa Manthey, a commodities strategist at ING Bank, much of the geopolitical premium is already reflected in gold's price, suggesting that renewed tensions are prompting position adjustments rather than new safe-haven purchases. Gold has fallen by over a fifth since the conflict with Iran began in late February. Despite the recent drop below $4,000, there are few indications of investors opening large-scale short positions, indicating market caution. Traders are also anticipating the minutes from the Federal Reserve's June meeting for further clues on the trajectory of interest rates.
