Gold Hits Over Six-Month Low on Rate Hike Concerns

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Gold hit its lowest price in almost half a year as fresh attacks by the U.S. against Iran boosted oil prices, raising expectations of inflation being sustained at a high level, which is likely to prolong high interest rates. Spot gold was down 0.2% at $4,063.87 per ounce following a decline to its lowest point since November 2025, while gold futures for August delivery in the U.S. dropped 1.1% to $4,086.50 per ounce.

This period of decline was due to rising oil prices, following a statement from Iran regarding its intention to close the Strait of Hormuz. Higher oil prices tend to lead to inflation, which increases the likelihood of monetary policy becoming more restrictive.

Markets Focus on Interest Rate Outlook

According to the latest statistics, consumer inflation in the United States has been increasing at its fastest rate in three years in May, boosted by increased energy costs, which have been driven up by the war going on in the Middle East. This increase in inflation expectations makes it likely that the Fed will keep its monetary policy tight for a long time to come.

Expectations of higher-for-longer interest rates tend to reduce the appeal of non-yielding assets such as gold.

Investors Await Key Economic Data

Investors are now awaiting the release of the United States Producer Price Index (PPI), which will give additional insights into the direction of prices and monetary policy stance.

Economic news might be important for the future movement of gold, either for consolidation at current levels or for further declines.

Other Precious Metals Show Mixed Performance

In the market of other precious metals, silver dropped by 0.9% to $63.15 per ounce, whereas platinum fell by 0.6% to $1,655.06 per ounce, and palladium increased by 1% to $1,225.25 per ounce.