Gold at $3,996 amid Iran-US tensions, oil price surge

July 17, 2026 (MLN): Gold was steady on Friday, though the metal remained on pace for its steepest weekly drop in six weeks as intensifying US-Iran hostilities pushed oil prices upward, stoking inflation concerns and bolstering expectations of tighter US monetary policy.

Currently, spot gold is down 1.35% to $3995.97 an ounce as of [11:45 am] PST, according to data reported by Mettis Global.

Bullion remains down 3.4% for the week, its worst such performance in six weeks, as tensions in the Middle East continued to overshadow the relief brought by weaker-than-expected US inflation data released earlier in the week, CNBC reported.

The escalation follows a fresh exchange of strikes between Iran and the US on Thursday, effectively collapsing the truce reached last month.

Crude oil, meanwhile, has surged nearly 12% this week on fears of disrupted shipping through the Strait of Hormuz, compounded by reports that Iran has urged Yemen's Houthi forces to be ready to close off the Red Sea shipping route.

Higher oil prices tend to fan inflationary pressures, which in turn raise the odds of further monetary tightening, an environment that typically weighs on gold since the metal yields no interest and becomes less attractive versus interest-bearing assets.

Markets are currently assigning a 73% probability to a rate hike in December, based on the CME FedWatch Tool.

Among other precious metals, silver dropped 0.6% to $55.20 an ounce, platinum declined 1.1% to $1,599.17, and palladium slipped 0.4% to $1,244.16 .

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