Gold is on track for its biggest weekly loss in six weeks amid escalating regional tensions.
Gold is on track for its biggest weekly loss in six weeks amid escalating regional tensions.
2026-07-17
Shafaq News – Erbil
Gold is on track for its biggest weekly loss in six weeks on Friday, as escalating tit-for-tat strikes between the United States and Iran have pushed up oil prices, adding to inflationary pressures and boosting the likelihood of a U.S. interest rate hike.
Gold rose 0.5 percent to $3,988.20 an ounce by 0313 GMT in spot trading, after hitting its lowest level since July 1 earlier in the session. U.S. gold futures for August delivery settled at $3,992.
However, the yellow metal has lost 3.2 percent since the start of the week, its biggest drop since early June, as the impact of tensions in the Middle East outweighed the support provided by the lower-than-expected US inflation figures for June, which were released this week.
Tim Waterr, chief market analyst at KCM Trade, said, “Even with moderate consumer price and producer price index figures, the rise in oil prices this week meant that traders simply couldn’t celebrate the lower inflation numbers.”
He continued, “Geopolitical risks in the Middle East remain, and concerns about inflation and yields are the dominant forces hindering gold’s rise.”
Iran and the United States exchanged intense strikes on Thursday in a week-long escalation that has significantly undermined a ceasefire agreement reached last month.
Oil prices have jumped by about 12 percent since the start of the week due to limited oil flows through the Strait of Hormuz, and Tehran has asked the Houthis in Yemen to prepare to close the export route through the Red Sea.
The sharp rise in oil prices threatens to reignite inflation fears and increase the likelihood of interest rate hikes. Gold, which does not offer interest, typically struggles in high interest rates, as investors gravitate towards assets offering better returns.
According to the CME Group’s FedWatch tool, traders currently expect a 73 percent probability of an interest rate hike in December.
As for other precious metals, silver fell 0.5 percent to $55.22 an ounce in spot trading, platinum dropped 0.7 percent to $1,605.62, and palladium declined 0.4 percent to $1,244.86. All three metals are on track to record weekly losses.
shafaq.com
