Gold Under Pressure, CPI and Kevin Warsh in the Spotlight
Newsmaker.id - Gold prices weakened on Monday (July 13th) after escalating Iranian attacks in the Gulf pushed up oil prices and heightened concerns about global inflation. Spot gold fell around 1.1% to US$4,076 per troy ounce, although geopolitical tensions typically increase demand for safe-haven assets.
Pressure on gold arose as the conflict between the United States and Iran lifted Brent prices by around 3.3% to around US$78.50 per barrel. Rising energy prices are feared to increase production and transportation costs, potentially keeping inflation high and encouraging the Federal Reserve to maintain or raise interest rates again.
Expectations for tighter monetary policy have also boosted the US dollar and US government bond yields. The market now estimates a 52.1% chance that the Fed will raise interest rates at least twice by its December meeting, up from 47.6% at the end of last week. This reduces gold's appeal because the precious metal does not provide an interest yield.
Investors are now awaiting the release of US Consumer Price Index (CPI) inflation figures on Tuesday, July 14, 2026, as well as testimony by Fed Chairman Kevin Warsh before Congress. Warsh is scheduled to speak before the House of Representatives on July 14 and the Senate on July 15, with the market looking for clues on the direction of interest rates amid inflationary pressures from the war and rising energy prices.
Market Impact:
Gold: Gold prices could remain under pressure if the CPI is higher than expected and Warsh signals a hawkish stance. However, a further escalation of the conflict could trigger renewed safe-haven buying.
US Dollar: The dollar has the potential to strengthen as inflation concerns raise expectations for a Fed rate hike.
US Bonds: Treasury yields have the potential to rise if the market expects interest rates to remain high for longer.
Oil: Brent and WTI have the potential to continue rising if an Iranian attack disrupts shipping and energy supplies through the Strait of Hormuz.
Stock Market: Global markets could be under pressure from a combination of rising energy costs, inflation risks, and the possibility of tighter monetary policy. (CP)
