Gold prices fell to around $4,067 per ounce on July 8 after U.S. President Donald Trump declared the interim ceasefire agreement with Iran “over” during the NATO summit in Turkey, triggering a sharp market selloff even as geopolitical tensions escalated in the Middle East.
Spot gold dropped 0.9% to $4,067.39 per ounce by 2:10 p.m. EDT, hitting its lowest level since July 1, according to Reuters. U.S. gold futures for August delivery settled 1.8% lower at $4,082.40 per ounce.
Trump’s announcement came after Iran said it had targeted U.S. military sites in Bahrain and Kuwait in response to U.S. strikes on Iranian targets following attacks on tankers in the Strait of Hormuz. The escalation sent crude oil prices surging more than 5%, a move that typically signals heightened geopolitical risk.
The counterintuitive decline in gold prices despite rising tensions reflected a complex interplay of market forces. “The main factor for today’s move is the increased escalation in tensions between the U.S. and Iran, with a potential ceasefire over, we’ve seen risk assets across the board trade lower, gold included,” said David Meger, director of metals trading at High Ridge Futures, according to Reuters.
Higher oil prices fuel inflation concerns, which can prompt central banks to raise interest rates to contain price pressures. Although gold is often viewed as a hedge against inflation, the non-yielding metal loses appeal in a high-interest-rate environment, as investors can earn returns elsewhere. Spot silver fell 2.9% to $58.25 per ounce, platinum shed 3.6% to $1,580.92, and palladium dipped 4.5% to $1,219.84.
Federal Reserve officials expressed mounting concern about high inflation at their June 16-17 meeting, with a few participants seeing a case to raise rates immediately, according to minutes released on July 8. Traders are now pricing in about a 69% chance of a U.S. rate hike in September, up from 62% on Tuesday, according to the CME FedWatch Tool.
Bank of America cut its 2026 average gold price forecast by 14% to $4,360 on expectations of a more hawkish Federal Reserve, though the bank still sees $5,000 within reach once the tightening cycle ends. The downward revision reflects growing expectations that elevated oil prices from the Middle East conflict will keep inflation pressures elevated, forcing the Fed to maintain higher rates longer than previously anticipated.
Sources
- Reuters — Gold price decline to $4,067.39 per ounce on July 8, Trump’s ceasefire announcement, oil price surge, Fed rate hike expectations, Bank of America’s gold forecast revision
- Trading Economics — Gold fell to 4,077.50 USD per troy ounce on July 8, 2026
- KITCO — Spot gold dropped 0.8% to $4,072.69 per ounce by 09:11 a.m. EDT
- FXStreet — Gold retreating toward $4,000 as US-Iran tensions revive Fed rate hike bets
