Oil prices moved lower on Tuesday as markets weighed hopes for a de-escalation between the United States and Iran against renewed attacks and growing risks to regional energy supplies.
Despite escalating tensions between the United States and Iran, gold and silver remain more heavily influenced by inflation, U.S. Treasury yields, and expectations surrounding Federal Reserve policy.
Gold prices were largely unchanged on Monday as investors weighed geopolitical risks from the U.S.–Iran conflict, movements in oil prices, and the possibility that the Federal Reserve may tighten monetary policy further.
Several Federal Reserve officials have recently warned that interest rates may need to rise further to bring persistent inflation under control. However, markets still expect the Fed to keep policy unchanged at its July meeting, while the probability of a September rate hike has increased.
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Gold ended the week at around $4,017.30 per ounce, down approximately 2.5% from the beginning of the week. The $4,000-per-ounce level has become a key threshold for the short-term outlook as markets continue to assess inflation risks, oil prices, and the Federal Reserve’s monetary policy.
The U.S. dollar was little changed on Friday but remained on track for a weekly decline after softer inflation data reduced expectations of an imminent Federal Reserve rate hike. Safe-haven demand linked to escalating tensions between the United States and Iran provided some support to the greenback, limiting its losses as oil prices traded near one-month highs.
Gold prices may remain under pressure in the coming months, but Bank of America believes lower prices could create attractive opportunities for long-term investors.
Oil prices edged lower on Thursday as traders assessed the escalating conflict between the United States and Iran and the potential risk of disruptions to energy supplies moving through the Strait of Hormuz.
Inflation is expected to remain the Federal Reserve’s primary concern for the rest of 2026. However, according to Christopher Hodge, Chief Economist for the U.S. market at Natixis, the Fed may continue to hold interest rates steady rather than rush into further monetary tightening.
However, elevated oil prices driven by escalating U.S.–Iran tensions mean inflation risks have not completely disappeared. Apparently, even when one source of inflation cools, geopolitics is eager to provide another.