Gold slips to $4,061 as Iran conflict lifts oil, rate hike odds

July 09, 2026 (MLN): Gold prices declined on Thursday, trading close to the previous session's one-week low, as escalating U.S.-Iran hostilities pushed oil prices higher and revived worries over inflation and the prospect of prolonged elevated interest rates.

Currently, spot gold is down 1.17% to $4,061.12 an ounce as of [09:52 am] PST, according to data reported by Mettis Global.

The U.S. military said Wednesday it had launched fresh strikes on Iran aimed at keeping the Strait of Hormuz open to shipping, prompting Iranian retaliation against Kuwait and Bahrain in the latest setback to efforts aimed at ending the conflict, according to CNBC.

Oil prices extended their gains into Thursday's session.

Markets are now pricing a 68% probability of a Federal Reserve rate hike in September, with the odds rising to 87% for an increase by January 2027, according to the CME FedWatch tool.

Inflation concerns had already surfaced at the central bank's meeting last month, with officials adopting a leaner policy statement under Fed Chairman Kevin Warsh's direction, even as some flagged that broadening price pressures could necessitate further rate increases.

Gold is traditionally viewed as a hedge against inflation, but elevated interest rates typically dampen appetite for the non-yielding metal.

Among other precious metals, spot silver dropped 0.9% to $57.77 per ounce, while platinum gained 0.8% to $1,591.13 and palladium rose 0.8% to $1,223.95.

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