Gold extended losses early Friday and appears headed for its biggest weekly dip in six weeks as the worsening conflict between the U.S. and Iran fanned fears of a prolonged period of worsening inflation and interest rate hikes to combat them.
The yellow metal settled Thursday at its lowest level in 19 months as oil prices rose, increasing inflationary fears and speculation that the Federal Reserve may have to increase rates sooner than later to cool the escalating costs of goods. Higher interest rates are typically bearish for gold, making the yellow metal a less attractive alternate investment. Gold prices have also dropped since February when tensions in the Middle East have increased.
August gold futures fell 1.5% Thursday to settle at $3,992.10 an ounce on Comex, the lowest closing price since November 2025. The front-month contract lost 3% in the first four days of the week. Bullion slid 12% in June after dropping 0.8% in May and losing 1% in April. It decreased 7% in the first half of 2026 after rallying 64% last year. The August contract is currently down $0.4 (-0.01%) an ounce to $3991.70 and the DG spot price is $3989.90.
The Iran conflict has curtailed oil tanker access to the Strait of Hormuz, a critical waterway for the energy industry. Global benchmark Brent blend oil futures prices are up 12% so far this week on the Iran news. The U.S. hit an oil tanker near the country’s main export terminal overnight. The U.S. has completed six consecutive nights of strikes by U.S. forces, and Iran has widened attacks.
Dallas Fed President Lorie Logan on Thursday called for “modestly” higher interest rates to rein in inflation toward the central bank’s 2% target. Logan is a voting member of the Fed’s policy-setting Federal Open Market Committee this year.
Over 89% of the investors tracked by the CME FedWatch Tool are betting on interest rates staying unchanged at the next policy meeting at the end of this month, while the respondents are split on a rate hike in September. The Fed has kept interest rates unchanged this year after three previous rate cuts. The Fed last month held interest rates steady at 3.5% to 3.75% but signaled growing support for a rate hike in 2026.
Front-month silver futures slid 2.2% Thursday to settle at $56.19 an ounce on Comex, and the September contract retreated 6.6% in the first four days of the week. The most-active contract touched a record above $115 in January. Silver declined 21% in June after gaining 2.5% in May and losing 1.2% in April. It lost 15% in the first half of 2026 after rising 141% last year. The September contract is currently down $0.877 (-1.56%) $55.310 and the DG spot price is $55.58.
Spot palladium decreased 2.5% Thursday to $1,266.60 an ounce and is down 1.4% this week. Palladium dropped 11% last month after losing 12% in May and rising 3.2% in April. It retreated 25% in the first half of 2026 after rising 74% last year. Currently, the DG spot price is down $29.30 an ounce to $1249.00.
Spot platinum declined 1.1% Thursday to $1,627.60 an ounce, though it gained 60 cents in the first four days of the week. Platinum tumbled 19% in June after dropping 3.2% in May and gaining 1.3% in April. Platinum slid 23% in the first half of 2026 after increasing 122% in 2025. The DG spot price is currently down $61.50 an ounce to $1580.00.
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