Gold managed to stay above $4,000 on Monday after briefly dipping below that level over the weekend. The metal's resilience came as Brent crude surged past $90 a barrel and Federal Reserve officials stepped up calls for a July rate hike, creating a tug-of-war between safe-haven demand and higher-rate headwinds.
Oil Surge and Escalating Middle East Conflict
The US carried out a ninth consecutive night of strikes against Iran, following the deaths of two American personnel in Jordan. Allies reported fresh Iranian attacks on Sunday. The escalation pushed oil prices above $90, reviving inflation fears that had been cooling in recent months.
Fed Officials Signal Another Rate Increase
Cleveland Fed President Beth Hammack joined a growing chorus of policymakers arguing that interest rates may need to rise again. Fed Chair Kevin Warsh told the House Financial Services Committee the central bank has “no tolerance for persistently elevated inflation.” The comments reinforced market expectations for a rate hike at the July meeting.
Gold’s Uneven Performance as a War Hedge
Gold’s war-hedge performance has been uneven during the conflict. While oil-driven geopolitical risk typically boosts the metal’s safe-haven appeal, the same oil spike is fueling rate-hike bets that punish non-yielding bullion. Gold posted a 2.5% weekly loss last week and briefly broke below $4,000, a level it first breached in late June for the first time since November 2025.
Speculators Stay Bullish Despite Pullback
COMEX speculators raised net long gold positions to 119,147 contracts in the week to July 14, suggesting some traders still see upside. But the pullback follows broader bear-market signals across precious metals. Silver has also seen a sharp pullback.
The Fed’s next policy meeting is scheduled for July 25-26, where a rate hike is now widely anticipated. Whether gold can hold above $4,000 until then will depend on how the oil-inflation dynamic evolves.
