Gold prices swung between gains and losses on Wednesday, as concerns around inflation and higher interest rates rose after fresh U.S. strikes on Iran lifted oil and the dollar ahead of the release of the Federal Reserve’s June meeting minutes.
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Gold prices fell on Wednesday as oil prices surged and inflation concerns intensified after U.S. President Donald Trump said an interim agreement aimed at ending the conflict with Iran was “over.”
SPOT GOLD LITTLE CHANGED AFTER US FED MINUTES, LAST DOWN 0.9% AT $4,068.09/OZ
Spot gold dropped 0.9% to $4,068.09 an ounce following the release of the latest Federal Reserve minutes, after hitting its lowest level since July 2 earlier in the session. U.S. gold futures for August delivery slipped 1.5% to $4,095.30 per ounce.
“The main factor for today’s move is the increased escalation in tensions between the U.S. and Iran, with a potential ceasefire over, we’ve seen risk assets across the board trade lower, gold included,” said David Meger, director of metals trading at High Ridge Futures.
In a flare-up of hostilities, Iran said it had targeted U.S. military sites in Bahrain and Kuwait after U.S. forces struck Iranian targets in response to attacks on tankers in the Strait of Hormuz. Crude oil prices jumped more than 5%.
Higher energy prices can fuel inflation and potentially prompt higher interest rates to contain price pressures. Although gold is often viewed as a hedge against inflation, the non-yielding metal tends to lose appeal in a high-interest-rate environment.
Gold showed little reaction to the release of minutes from the Federal Open Market Committee’s June 16-17 meeting at 2 p.m. ET.
The minutes showed Fed officials were split last month about the future of interest rates, with policymakers entertaining scenarios in either direction. In Kevin Warsh‘s first meeting as chairman of the FOMC, participants saw outcomes where inflation could ease and allow lower rates, while others envisioned a scenario where price increases stay elevated and lead to hikes.
“There is a bit of a murky environment right now in regards to the future path of rates, with the market searching for any type of information that would lead to some clarity in regards to the path of rate hikes moving forward,” Meger said.
Traders are pricing in about a 67% chance of a U.S. rate hike in September, up from 62% on Tuesday, according to the CME FedWatch tool.
Bank of America, in a note Tuesday, said it is reducing 2026 average gold forecasts by 14% to $4,360 on a more hawkish Fed, but added that it still sees $5,000 in reach once the tightening cycle ends.
Among other metals, spot silver fell 2.42% to $58.5681 per ounce, platinum shed 3.6% to $1,582.13, and palladium dipped 4.3% to $1,221.97.
