Gold is holding near the $4,000 mark as investors try to balance rising geopolitical risk with the threat of higher interest rates keeping pressure on the precious metal.
Spot gold added 0.2% on Monday to $4,024.09 an ounce. Gold futures rose a similar amount to $4,028.32. The moves came after bullion dropped more than 2% last week.
Silver also moved higher, gaining 1.8% to $56.97 an ounce. Platinum edged up 0.2% to $1,598.45.
Military activity between the United States and Iran escalated over the weekend. An attack hit a major oil facility in Kuwait, and strikes targeted vessels traveling through the Strait of Hormuz, a key route for global oil shipments.
BREAKING: Footage shows the moment Iran struck the Al-Subiya Kuwaiti power station and water desalination plant today, with a fire breaking out in the facility and severe damage caused to multiple electricity generation units.
This is the second day an Iranian strike hit Kuwaiti… pic.twitter.com/xlJyzhBGiy
— The Hormuz Letter (@HormuzLetter) July 19, 2026
Iran said the ceasefire with the U.S. had effectively broken down. The conflict is now in its fifth month and has kept energy markets on edge.
Brent crude climbed above $90 a barrel on the news before easing back slightly. Higher oil prices raise concerns that inflation could stay elevated for longer than expected.
Despite the tension, there are some signs diplomacy is still possible. U.S. Secretary of State Marco Rubio said Washington remains open to talks with Iran. Iranian Foreign Minister Abbas Araghchi also said negotiations could begin once “strategic gains” are achieved.
The main pressure on gold right now is the Federal Reserve’s interest rate path. Higher oil prices could keep inflation above the Fed’s 2% target, which may force policymakers to hold rates higher for longer.
Elevated rates tend to boost the U.S. dollar and Treasury yields, making non-yielding assets like gold less attractive to investors.
Market expectations for a Fed rate hike at the July 29 meeting briefly jumped to 40% last week as fighting intensified. Those odds have since fallen back to around 10%.
ANZ analysts say the bar for another rate increase remains high. They expect the Fed to look past higher energy prices unless they cause broader inflation across the economy.
ANZ also expects gold to find support in the $3,800 to $4,000 range as rate hike expectations fade.
Gold has traded in a narrow range around $4,000 for recent weeks. It fell 14% in the second quarter, its worst quarterly performance since 2013, as rate fears consistently outweighed safe-haven demand.
Recent U.S. inflation and jobs data have shown some softening in the economy, but markets are waiting to see if energy costs change that picture ahead of the Fed’s next meeting on July 29.
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