Gold falls as Mideast tensions fuel inflation fears

FE Team | Published: June 29, 2026 22:42:31

Gold fell on Monday as recent hostilities in the Middle East fueled inflation concerns and added to expectations of US Federal Reserve rate hikes, reports Reuters.
Spot gold was down 1.3 per cent at $4,035.79 per ounce, as of 1142 GMT. US gold futures for August delivery fell 1.1 per cent to $4,050.02/oz.
Bullion posted a 1.7 per cent weekly decline on Friday and is on course to fall more than 10 per cent in June, which would mark its fourth straight month of losses.
Iran and the United States agreed to halt recent hostilities in the Gulf and renew talks regarding their dispute over the Strait of Hormuz, a US official said on Sunday.
Iran launched missiles and drones at US military sites in Kuwait and Bahrain early on Sunday, shortly after President Donald Trump threatened that the Islamic Republic would cease to exist if it did not honor an agreement to end the war.
"Gold prices are under pressure as investors remain uncertain about the progress of US-Iran peace talks," said ActivTrades analyst Ricardo Evangelista, adding that renewed flare-ups could lift energy prices, revive inflation concerns and reinforce hawkish central bank expectations.
Crude oil prices were higher on the day.
While gold is often seen as a hedge against inflation, its appeal tends to diminish in a high-interest-rate environment as it offers no yield.