Gold prices slip as Middle East tensions overshadow inflation data

July 16, 2026 (MLN): Gold prices declined on Thursday as intensifying conflict in the Middle East showed no signs of easing, wiping out recent optimism over cooling inflation and stoking fears that rising oil prices could push the Federal Reserve toward further rate hikes.

Currently, spot gold is down 0.57% to $4,029.85 an ounce as of [11:00 am] PST, according to data reported by Mettis Global.

Oil extended gains for a fourth straight session after the US carried out two rounds of strikes on Iran's coastal defences and missile installations, alongside reimposing a naval blockade on Iranian ports.

 Iran responded by striking US military positions in neighbouring countries, describing the confrontation as an "existential war" with Washington.

Data released this week showed US consumer and producer inflation slowed in June, aided by a decline in energy costs, suggesting price pressures were easing before the latest escalation in the Middle East.

The moderation, however, was not sufficient to rule out a Fed rate hike later this year, with the CME FedWatch Tool showing markets pricing in a 73% probability of a December increase.

Fed Governor Lisa Cook said she was prepared to act should inflation fail to slow in the near term, while Fed Chairman Kevin Warsh reiterated his resolve to bring inflation down, without specifying the policy path ahead, according to CNBC.

Markets are now awaiting comments from Dallas Fed President Lorie Logan and Fed Vice Chair Philip Jefferson, both scheduled to speak later in the day.

Among other precious metals, spot silver dropped 1.1% to $57.14 per ounce, platinum eased 0.6% to $1,664, and palladium edged 0.3% lower to $1,309.86.

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