Gold Price Plummets to US$3,900 Level

The price of gold plunged almost 3% on Monday after United States President Donald Trump announced the re-imposition of a naval blockade against Iran. The move triggered a spike in oil prices, heightened inflation concerns, and increased the chances of US interest rates staying higher for longer.

Citing Refinitiv data, gold prices in trading on Monday (13/7/2026) closed at US$4,000.65 per troy ounce, a drop of 2.9%. Yesterday’s closing price was the lowest since 24 June 2026. The decline also brought gold down by 3% over two consecutive days.

On Tuesday (14/7/2026) at 06:39 Western Indonesia Time, the gold price fell further to US$3,999.17 per troy ounce, weakening by 0.16%. This means gold has slumped to the US$3,900 per troy ounce level.

“Oil prices have surged due to the conflict in the Middle East, and there is potential for policy tightening by the Federal Reserve. This is bad news for non-yielding assets like gold,” said Forex.com market analyst Fawad Razaqzada.

According to him, if oil prices continue to rise, the gold price could potentially break below US$3,800 per troy ounce in the short term, and could even fall towards US$3,500 if selling pressure intensifies.

Trump announced on Monday that the US is re-imposing a naval blockade on Iran and will impose a 20% fee on all cargo transiting the Strait of Hormuz, after Tehran claimed to have closed the strategic shipping lane. The news immediately sent oil prices surging by around 5%.

The rise in oil prices has the potential to trigger inflation by increasing energy and transportation costs. This condition could prompt the central bank to maintain higher interest rates for longer, or even raise them again to curb price pressures.

According to the CME Group’s FedWatch Tool, market participants now see a 75% chance that the Federal Reserve will raise interest rates in September. Investors will also be scrutinising a slew of important US economic data this week, including the Consumer Price Index (CPI), Producer Price Index (PPI), and weekly jobless claims.