Gold falls early Monday after Iran tensions ramped up over the weekend as teh U.S. and Iran exchanged strikes in the Persian Gulf, pushing oil prices higher, damping the likelihood of a lasting peace accord and boosting expectations of an interest rate hike this year to combat inflation.
Iran attacked Bahrain and Kuwait on Sunday after U.S. attacks on Iran, and Tehran threatened to halt negotiations intended to resume ship traffic through the Strait of Hormuz, a key waterway for oil shipping.
Investors were closely watching for the release of a series of key U.S. jobs report this week for the latest indications on the state of the economy.
August gold futures fell 3.5% last week to settle at $4,096.30 an ounce on Comex, though the front-month contract rose 1.2% Friday. Bullion is down 11% this month after dropping 0.8% in May and losing 1% in April. It rallied 64% last year. The August contract is currently down $46.40 (-1.13%) an ounce to $4049.90 and the DG spot price is $4036.60.
The Federal Reserve is seen as increasingly likely to raise interest rates this year to combat inflation, which has risen amid the conflict with Iran and higher oil prices. Investors will be closely watching for comments from new Fed Chair Kevin Warsh this week at the annual central banker meting in Sintra, Portugal.
Also informing on the state of the economy will be a series of U.S. job reports. The U.S. Job Openings and Labor Turnover Survey, known as the JOLTS report, comes out Tuesday, followed Wednesday by the private payrolls report from ADP, and Thursday by the weekly U.S. initial jobless claims and key U.S. monthly jobs report for June. The latter will come out a day earlier than usual ahead of the Independence Day holiday.
Last week, the Fed’s favorite inflation measure, the personal consumption expenditures price index, came out with May data and showed the index, excluding volatile food and energy prices, reached the highest level since October 2023.
The Fed earlier this month held interest rates steady at 3.5% to 3.75%, as expected, but signaled growing support for a rate hike in 2026. Warsh’s comments in Portugal will be closely followed for any perceived change on this position.
Over 70% of the investors tracked by the CME FedWatch Tool are betting on interest rates staying unchanged in July, though they see an increase as early as September. At the start of the year, before the war, the central bank had been expected to loosen monetary policy in 2026. But the Fed has kept interest rates unchanged this year after three previous rate cuts. Higher rates are typically bearish for gold, making it a less attractive investment than other assets.
Front-month silver futures tumbled 11% last week to settle at $59.67 an ounce on Comex, though the September contract gained 1.5% Friday. The most-active contract touched a record above $115 in January. Silver is down 21% this month after gaining 2.5% in May and losing 1.2% in April. It rose 141% last year. The September contract is currently down $0.739 (-1.24%) an ounce to $58.935 and the DG spot price is $58.33.
Spot palladium decreased 5.6% last week to $1,221.00 an ounce but increased 1.6% Friday. Palladium is down 10% this month after dropping 12% in May and rising 3.2% in April. Palladium rose 74% last year. Currently, the DG spot price is down $2.90 an ounce to $1221.50.
Spot platinum retreated 4.2% last week to $1,641.90 an ounce, but rose 1.8% Friday. Platinum is down 15% in June after dropping 3.2% in May and gaining 1.3% in April. Platinum increased 122% in 2025. The DG spot price is currently down $52.40 an ounce to $1585.90.
Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand, and accept this disclaimer.