Gold Falls 10.4% Over Four Consecutive Months as U.S.-Iran Strikes Push Oil Prices Higher and Fuel Rate Hike Expectations
Alina Collins
Spot gold fell to $4,061, extending its losing streak to four consecutive months with a cumulative 10.4% decline; renewed U.S.–Iran strikes pushed oil higher and fueled rate-hike expectations, squeezing a zero-yield asset.
How far has gold fallen?
Spot gold slid 0.7% on June 29 to $4,061.35 per ounce. August futures dropped 0.5% to $4,076.40.
Gold has now declined for four straight months, losing a cumulative 10.4% — a rare sustained monthly slide in recent years.
The second-quarter loss totals roughly 13%, the steepest quarterly drop since 2013.
Why did a military clash hurt gold instead of helping it?
Iran fired missiles and drones at U.S. bases in Bahrain and Kuwait on Sunday. Tehran and Washington later agreed to pause hostilities and reopen talks over the Strait of Hormuz dispute, according to Axios.
The chain runs: conflict lifts oil → higher oil stokes inflation expectations → markets bet the Fed keeps tightening. This means → gold, an asset that pays no interest, becomes less attractive as rates rise — so rising oil actually drags gold down.
KCM Trade chief market analyst Tim Waterer said: "Reports of fresh strikes raise further doubt about how long oil can stay low, feeding through to the broader inflation and rate outlook."
What are rate expectations and the dollar doing?
The CME FedWatch tool shows traders pricing in three Fed rate hikes this year, with roughly 80% odds of a December increase.
In plain terms = the market is betting rates still have further to climb, which raises the "opportunity cost" of holding gold — the same money in bonds earns interest, in gold it earns nothing.
The dollar index rose about 2.5% in June to 101.33, near a one-year high. A stronger dollar adds further pressure to dollar-denominated gold.
How are other precious metals behaving?
Spot silver fell 1.1% to $58.51 per ounce, tracking gold lower.
Platinum gained 1% to $1,630.13; palladium rose 0.8% to $1,218.92 — both supported by industrial demand and diverging from gold.
This reflects a split inside the precious-metals complex: metals with stronger industrial use are less exposed to rate-hike pressure.
Can gold get back to $5,000?
Waterer noted a return to $5,000 this year is not impossible — but three conditions must align.
One: a meaningful de-escalation in the U.S.–Iran conflict. Two: oil falling back to pre-conflict levels to ease inflation pressure. Three: a weaker dollar.
Two key releases this week — June ADP payrolls and the U.S. nonfarm payrolls report — will shape the Fed policy outlook further. This means → if jobs data come in strong, rate-hike bets will intensify and gold's near-term rebound room stays limited.
Content is for reference only, not financial advice.