The global gold market is experiencing heightened volatility. In mid-July 2026, the rapid escalation of the US-Iran conflict has turned the security of the Strait of Hormuz into one of the biggest uncertainties facing global energy markets, placing significant downward pressure on gold prices. While geopolitical tensions would normally support demand for gold as a traditional safe-haven asset, soaring oil prices have reignited inflation concerns and strengthened expectations of further Federal Reserve tightening, limiting gold's ability to benefit from safe-haven flows in the short term.

The intensity of the latest US-Iran confrontation has exceeded market expectations. The United States launched multiple precision strikes against Iranian military targets in response to attacks on commercial vessels near the Strait of Hormuz. Iran retaliated by expanding its attacks to facilities across several Gulf states and announced the closure of the Strait of Hormuz, a critical artery for global oil transportation. The escalation drove international crude oil prices sharply higher during the week, with WTI crude climbing nearly 4% at one stage. The surge in energy prices has quickly translated into stronger inflation expectations.

According to TD Securities, investors are increasingly reluctant to maintain long positions in gold, with prices retreating toward the $4,100 level. The International Energy Agency's earlier forecast of a significant global oil surplus next year could be completely overturned if the conflict continues, as supply disruption concerns have become the dominant market narrative.

Rising energy prices have also reinforced expectations of tighter US monetary policy. Markets are now pricing in a roughly 74% probability of a Federal Reserve rate hike in September and an 88% chance of at least one additional rate increase before year-end. This shift in expectations is negative for gold, as higher interest rates increase the opportunity cost of holding non-yielding assets.

Investor attention this week will focus on Federal Reserve Chair Kevin Warsh's congressional testimony, alongside a series of key US inflation and economic data releases. June CPI data will be released on Tuesday, followed by PPI and manufacturing figures on Wednesday, retail sales and weekly jobless claims on Thursday, and housing starts on Friday. These reports are expected to provide greater clarity on the future path of monetary policy. Should the data confirm persistent inflationary pressures, the Fed's hawkish stance may strengthen further, keeping gold under pressure in the near term.

Market Insight:

On the 4-hour chart, gold remains in a downward consolidation trend, with both the MACD lines and histogram expanding around the zero line, indicating persistent bearish momentum. The precious metal continues to face pressure from two major forces: elevated geopolitical risk driving inflation through higher energy prices, and increasingly hawkish expectations for US monetary policy. With the US-Iran conflict showing little sign of easing and several major economic releases scheduled this week, market sentiment is likely to remain highly sensitive to incoming developments.