Gold prices dropped sharply on Monday after the United States carried out new strikes on Iranian targets over the weekend, sending oil prices surging and reigniting inflation concerns.
At around 01:05 ET, gold spot prices fell 1.54% to $4,057.76 an ounce. Gold futures slipped 1.17% to $4,065.45. Silver dropped 2.80% to $58.19 an ounce, and platinum fell 1.61% to $1,604.60.
The latest escalation came after the U.S. struck Iranian targets following an attack on a Cyprus-flagged cargo vessel in the Strait of Hormuz. Iran said the key shipping route would remain closed until further notice. U.S. officials disputed that claim.
BREAKING: The US has struck Kharg Island's western jetty pumping station and multiple pipelines supplying Kharg's pumping stations, with fires visible on NASA FIRMS satellite imagery.
This is the first US strike specifically targeting oil infrastructure at Kharg, Iran's primary… pic.twitter.com/lhO9DqGa2Q
— The Hormuz Letter (@HormuzLetter) July 13, 2026
Oil prices were up more than 3% on Monday after earlier jumping nearly 5%. Traders are pricing in the risk of supply disruptions through the Strait of Hormuz.
Rising energy prices are bringing back fears of a new inflation shock. That could force the Federal Reserve to keep interest rates higher for longer, which is bad news for gold.
Gold does not pay interest. When yields and the dollar rise, gold becomes less attractive to investors. The U.S. Dollar Index edged up 0.3% on Monday, adding more pressure on the metal.
Minutes from the Fed’s June meeting, released last week, showed several policymakers thought there was a case for raising rates. Officials also expressed growing concern about inflation, even as worries about the labor market eased.
The next Federal Reserve meeting is set for July 28–29.
Investors are now focused on two upcoming events. The first is Tuesday’s U.S. consumer price index report. The second is Federal Reserve Chair Kevin Warsh’s first congressional testimony.
Both could move markets. A hotter-than-expected CPI print could push the dollar higher and weigh further on gold. A softer reading could help gold find its footing.
Tony Sycamore, market analyst at IG, said gold is highly sensitive to both geopolitical developments and U.S. inflation data right now.
He said gold held support near the $4,000 level last week. A sustained move above $4,200–$4,220 could open the door to a recovery toward the 200-day moving average near $4,491.
However, Sycamore warned that a strong CPI report could cement expectations for another Fed rate hike before year-end.
Gold has been caught between geopolitical risk supporting prices and monetary policy pressure pushing them lower. For now, the macro outlook is in control.
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