Gold climbs 1.0pc, all eyes on Fed meeting
Tuesday, 28 July 2026
Gold prices climbed on Monday as a pause in strikes between the United States and Iranian forces dragged crude oil prices lower, helping ease inflation concerns and worries about the risk of higher interest rates in a week when Fed policymakers are due to meet, reports Reuters.
Spot gold gained 1 per cent to $4,092.87 per ounce by 1200 GMT, while US gold futures for August delivery rose 0.7 per cent to $4,098.00.
"Precious metals have started the week on the front foot, helped by a pause in Middle East hostilities. Oil has slumped and both the dollar and US Treasury yields have eased," said independent analyst Ross Norman.
The US dollar index dropped 0.2 per cent, making greenback-priced bullion more affordable for buyers overseas.
On Sunday, Iran said it would halt its own attacks as long as the United States does the same, a senior Iranian official told Reuters. Washington paused its bombing campaign after President Donald Trump's advisers told him they were running out of targets and expressed worries about depleting the US arsenal.
Oil prices tumbled more than 5 per cent on Monday, raising hopes of a diplomatic solution to de-escalate the conflict surrounding the Strait of Hormuz.
Elevated energy prices bolster inflation concerns and raise expectations of higher-for-longer interest rates. While gold is seen as a hedge against inflation, the yellow metal suffers in a high interest rate environment due to its non-yielding characteristic.
Investors are now eyeing the Fed's interest rate decision meeting on Wednesday, with about 34 per cent of market participants anticipating a rate hike.
"Gold is flashing cautiously positive signals: one eye on Iran, the other on ?the Fed. If Warsh pushes back against the roughly two hikes now embedded in the curve, that could be quite supportive for gold," Norman said.
Traders are pricing in about a 79 per cent chance of an interest rate hike in September, according to the CME FedWatch Tool.
Elsewhere, spot silver rose 1.5 per cent to $59.05 per ounce, platinum gained 2.7 per cent to $1,631.22, and palladium climbed 2.7 per cent to $1,277.47.