Bullion falls as much as 0.5% as oil prices and bond yields push higher amid escalating Middle East tensions
Published Fri, Aug 7, 2026 · 08:41 AM
[NEW YORK] Gold edged lower, snapping a three-day advance, as a renewed surge in oil prices fuelled inflation concerns and clouded the outlook for the US Federal Reserve’s interest rate path.
Bullion fell as much as 0.5 per cent as oil prices and bond yields pushed higher on the back of escalating tensions in the Middle East and a lack of clarity on a deal to reopen the Strait of Hormuz.
Higher energy costs fuelled speculation that the Fed may need to raise rates to contain consumer prices. Higher rates are typically negative for gold as it pays no interest.
The Houthi militant group said it conducted a “large-scale” attack against forces from Yemen’s Saudi-backed government, raising concerns about a broadening of the US-Israeli war on Iran into a region-wide conflict.
Gold has fallen by nearly a fifth since the US-Iran war began in late February. The conflict sent energy prices soaring, stoked inflationary pressures and raised the likelihood that rates will stay higher for longer.
The precious metal has managed to trade around US$4,000 in recent weeks, helped by macro discretionary funds and top funds on the Shanghai Futures Exchange in recent weeks, according to Ryan McKay, senior commodity strategist at TD Securities.
Nonetheless, “a still extremely tight energy market will remain a major hurdle for a renewed bull run”, he added in a note.
Spot gold fell 0.2 per cent to US$4,237.05 an ounce as at 4.41 pm in New York. Silver dropped 0.9 per cent. Platinum slipped while palladium advanced.
The Bloomberg Dollar Spot Index, a gauge of the US currency, rose 0.2 per cent. BLOOMBERG
