Gold rises to a two-week high early Wednesday as investors bought a dip caused by escalating tensions in the Middle East and speculation of an upcoming Federal Reserve interest rate hike.
Traders tested a settlement below $4,000 an ounce last week but the new level didn’t hold, triggering a technical bounce. Investors continued to watch the situation in the Middle East and the economic outlook for cues on direction. The Iran war ended a multiyear bull run for gold after it began in late February, while expectations of worsening inflation because of the war has prompted bets that the Fed will have to increase rates. Higher interest rates are considered bearish for gold, making it a less attractive alternate investment.
U.S. Secretary of State Marco Rubio on Wednesday warned that an Iranian demand to control and collect tolls to navigate the Strait of Hormuz, a key waterway for oil shipments, would threaten the global economy. He spoke in Manila at the start of an annual meeting with his counterparts from the Association of Southeast Asian Nations. The question on passage through the Strait helped derail a U.S.-Iranian ceasefire earlier this month, with both sides subsequently stepping up attacks.
August gold futures rallied 1.5% Tuesday to settle at $4,076.40 an ounce on Comex, and the front-month contract gained 1.4% in the first two 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 up $74.40 (+1.83%) an ounce to $4150.80 and the DG spot price is $4147.50.
Over 73% of investors tracked by the CME FedWatch Tool are betting on interest rates staying unchanged at the next Fed policy meeting next week, while over 71% see 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.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, comes out next week, the day after the Fed is scheduled to make its next monetary policy announcement.
Front-month silver futures gained 3.6% Tuesday to settle at $59.11 an ounce on Comex, and the September contract increased 4.9% so far this 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 DG spot price is currently up $1.087 (+1.84%) an ounce to $60.195 and the DG spot price is $60.18.
Spot palladium rose 1.3% Tuesday to $1,291.50 an ounce and has advanced 2.4% 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 up $30.90 an ounce to $1321.50.
Spot platinum climbed 2% Tuesday to $1,633.00 an ounce and is up 1.4% so far this 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 up $30.70 an ounce to $1662.60.
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