Gold Price Slumps Again, Warning: The Big Storm Is Not Over
Jakarta, CNBC Indonesia - Gold prices weakened at the end of this week amid rising oil prices due to conflict in the Middle East. This condition triggered inflation concerns and strengthened expectations of tighter monetary policy from the United States (US).
In the final trading session of the week, Friday (10/7/2026), gold closed at US$ 4,120.08 per troy ounce. The price edged down 0.03%.
This decline contrasted with the 1.1% surge on the previous Thursday.
Over the week, gold prices fell 1.31%. This weekly decline was also bad news after prices had risen 2.12% the week before.
“The main factor right now is the reheating of tensions between the US and Iran. Investors are generally reluctant to hold gold or silver positions at the moment, so prices are moving down towards the US$4,100 level,” said Bart Melek, Global Head of Commodity Strategy at TD Securities, to Reuters.
The latest escalation in the conflict between the US and Iran could potentially derail the International Energy Agency’s (IEA) projection of a significant global oil supply surplus next year.
Brent crude oil prices soared 5.4% this week, driven by supply concerns following the latest attacks between the United States (US) and Iran.
The rise in energy prices heightened inflation worries, thereby strengthening expectations that central banks will raise interest rates again.
Although gold has long been known as a hedge against inflation, rising interest rates typically put pressure on the precious metal because they increase the attractiveness of yield-bearing assets, such as bonds.
“All indicators show the market is worried about inflation, especially after oil prices strengthened again in recent days. This condition will keep central banks, particularly the Federal Reserve, on high alert,” said Melek.
Market participants now see a roughly 69% chance that the Fed will raise interest rates in September, based on the CME FedWatch Tool.
The minutes from the Federal Reserve’s June meeting also showed a divergence of views leaning hawkish among central bank officials, amid growing concerns over persistently high inflation.
Investors are now awaiting US inflation data next week and a speech by Fed Chair Kevin Warsh to obtain further clues on the direction of monetary policy.
On the other hand, gold was trading at a significant discount in India throughout this week.
Meanwhile, demand in China remained stable after the country’s central bank reported the largest monthly increase in gold reserves in more than two and a half years in June.