Gold Prices Fall as Trump's Tough Talk and Iran Ceasefire 'End'

Gold prices fell on Wednesday (8th) as oil prices surged following the end of a temporary ceasefire agreement between U.S. President Trump and Iran, reigniting inflation concerns and weighing on non-yielding gold.

Spot gold dropped 0.9%, closing at $4,067.39 per ounce, briefly touching its lowest level since July 1 during the session.

August-delivery gold futures declined 1.8%, settling at $4,082.40 per ounce.

David Meger, Director of Metals Trading at High Ridge, said, "The main driver of price movements today was the heightened tension between the U.S. and Iran. With the ceasefire agreement potentially ending, we saw a sell-off across all risk assets, including gold."

Hostilities between the two nations escalated sharply, with the U.S. launching attacks in retaliation for Iran's assaults on commercial vessels in the Strait of Hormuz, while Iran stated it had targeted military bases in Bahrain and Kuwait. This development sent international oil prices soaring by over 5%.

Rising oil prices typically push up inflation and may force central banks to raise interest rates to curb price pressures. Although gold is generally seen as a hedge against inflation, its appeal as an investment diminishes in a high-interest-rate environment because gold itself yields no return.

Meanwhile, minutes from the Federal Reserve's (Fed) June 16–17 meeting released on Wednesday showed officials' growing concerns about high inflation, with a few participants suggesting the possibility of an immediate rate hike.

The CME's FedWatch tool indicates that traders currently assign about a 69% probability to a rate hike in September, up from 62% on Tuesday.

On Tuesday, Bank of America lowered its 2026 gold price forecast by 14% to $4,360 per ounce, citing a more hawkish Fed, but believes gold could return to $5,000 once the tightening cycle ends.

Other precious metals trading

Spot silver fell 2.9%, to $58.25 per ounce.

Spot platinum dropped 3.6%, to $1,580.92 per ounce.

Spot palladium declined 4.5%, to $1,219.84 per ounce.