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.
Gold prices recovered strongly during Tuesday’s trading session after weaker-than-expected U.S. inflation data eased pressure on the Federal Reserve to raise interest rates further. A softer U.S. dollar, lower Treasury yields, and ongoing tensions in the Strait of Hormuz also supported demand for the precious metal.
Global oil prices rose nearly 3% on Tuesday, reaching their highest level in four weeks as the United States and Iran intensified military activity in the Strait of Hormuz. The escalation has raised concerns about possible disruptions to energy supplies through one of the world’s most important oil transit routes.
Gold has recently gone through a sharp correction, but this does not necessarily weaken its long-term outlook. On the contrary, in an environment where the U.S. dollar is strengthening, interest rates remain elevated, and the global financial system is becoming increasingly fragmented, gold’s strategic role is becoming even clearer.
Global financial markets came under pressure at the start of the week as tensions in the Middle East escalated, pushing oil prices sharply higher and raising concerns that inflation could return. At the same time, profit-taking pressure in AI-related stocks also made investors more cautious.
Global central banks continue to show strong confidence in gold, not only through survey expectations but also through actual buying activity. This shows that gold still plays an important role in the global monetary reserve system, especially in a period of economic and geopolitical uncertainty.
The minutes from the Federal Reserve’s June policy meeting showed that Fed officials remain cautious about inflation risks. Although interest rates are currently being held steady, policymakers appear divided between those who support maintaining the current policy stance and those who believe further rate hikes may still be necessary.
At the time of writing, spot gold was trading around $4,118.66 per ounce, down 0.13%. Meanwhile, spot silver traded near $59.809 per ounce, down 0.90% for the session.
Gold remains an important asset in investment portfolios, especially as macroeconomic uncertainty, geopolitical risks, and de-dollarization trends continue to shape global markets.
At the time of writing, spot gold was trading around $4,120.80 per ounce, up 1.13%. Spot silver was near $59.95 per ounce, rising sharply by 2.82% for the session.