Gold Prices Fluctuate Amid Iranian Attacks and Fed Outlook

Gold prices fluctuated on July 7, 2026, with values ranging from $4,120 to $4,168 per ounce. The market responded to a combination of geopolitical escalation in the Middle East and the U.S. Federal Reserve's interest rate trajectory. Prices fell as much as 1.2% in London due to a strong U.S. dollar and rising global bond yields.

The Federal Reserve System continues to influence bullion through its benchmark rate of 3.50% to 3.75%. Investors are currently awaiting the June meeting minutes to see if Chair Kevin Warsh maintains a hawkish stance on inflation. While weaker U.S. jobs data provided some support, energy price spikes have fueled expectations for higher-for-longer rates. Traders on Polymarket estimate a 54% probability of gold reaching $4,300 in July.

Geopolitical instability added volatility after Iran fired at least two missiles at commercial ships in the Strait of Hormuz, including a liquefied natural gas tanker hit near Oman. These attacks, and subsequent threats from U.S. President Donald Trump to restart the war, led Iran to stall peace talks. Despite the immediate price volatility, the People's Bank of China maintained gold purchases for a 20th consecutive month, and Hong Kong launched a new gold central clearing system to serve as a regional reserve hub.