Gold heads for biggest weekly loss since early June on inflation fears

Reuters

Saturday 18 July 2026 1:5 | 2 minutes read

Gold prices rose on Friday but were heading for their biggest weekly loss in six weeks, as escalating tensions between the United States and Iran pushed energy prices higher and fueled inflation fears, boosting expectations of an interest rate hike by the Federal Reserve.

Spot gold rose 1% to $4,011.29 an ounce by 1820 GMT.

Prices had earlier fallen to their lowest since June 30, and were down about 2.6% for the week.

U.S. gold futures for August delivery settled 0.7% higher at $4,018.80 an ounce.

The dollar rose for a second straight session, making the precious metal more expensive for holders of other currencies.

Read also: Oil jumps as US-Iran tensions resume over Hormuz Strait

Chris Gaffney, president of global markets at EverBank, said: 'The two main factors behind the sell-off in gold are the strength of the dollar and rising global inflation fears, which have pushed global interest rates higher.'

The United States intensified its new military campaign against Iran, targeting bridges and an airport, while Tehran responded by launching attacks across the Middle East.

Brent crude oil prices rose about 16% during the week following those attacks.

Since the war on Iran broke out in late February, gold has fallen about 25% under pressure from expectations that war-driven inflation would keep interest rates higher for longer.

Read also: US launches raids on Iran for seventh night and diverts course of 4 ships

Gold is typically seen as a hedge against inflation, but higher interest rates usually reduce the appeal of the non-yielding metal.

The CME FedWatch tool shows traders currently see a 58% probability of an interest rate hike in September.

Among other precious metals, spot silver rose 1% to $56.06 an ounce.

Platinum fell 1.4% to $1,595.64 an ounce, while palladium was flat at $1,249.63. All three metals were heading for weekly losses.

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