Investors will be closely watching for the Fed’s outlook on the economy and signals on monetary policy for the rest of the year amid expectations of interest rate increases in the coming months. Though the central bank is widely expected to hold interest rates unchanged on Wednesday, almost a third of investors are betting on a surprise rate hike.
The U.S. and Saudi Arabia said they carried out joint airstrikes on Iranian proxies in Iraq early Wednesday, while the Iranian military said separately that it had targeted American military assets in Jordan. Oil prices rallied. Since the Iran war began in late February, gold prices have fallen on signs the conflict is worsening and rallied on signals that it’s improving or pausing.
December gold futures slid 0.9% Tuesday to settle at $4,098.60 an ounce on Comex, and the front-month contract is down 0.8% so far this week. Bullion is up 1.5% in July after sliding 12% in June and dropping 0.8% in May. It decreased 7% in the first half of 2026 after rallying 64% last year. The December contract is currently down $26.30 (-0.64%) an ounce to $4072.30 and the spot price is $4014.50.
Oil prices have surged since the conflict with Iran began because of a shutdown of the Strait of Hormuz, a key chokepoint for the oil industry. This has added to inflationary pressure and increased speculation of a Fed rate hike to get inflation under control. Higher interest rates are typically bearish for gold, making it a less attractive alternate investment.
Most investors don’t expect an interest rate increase until September, but about 36% of those tracked by the CME FedWatch Tool have bet on a rate hike Wednesday. The Fed has kept interest rates unchanged this year after three previous rate cuts. The Fed last month held interest rates steady at 3.5% to 3.75% but signaled growing support for a rate hike in 2026.
Investors are also awaiting key inflation data for June scheduled for release Thursday in the personal consumption expenditures price index, the Fed’s favorite inflation measure.
Front-month silver futures fell 2% Tuesday to settle at $57.53 an ounce on Comex, and the September contract decreased 2.3% in the first two days of the week. The most-active contract touched a record above $115 in January. Silver is down 4% in July after declining 21% in June and gaining 2.5% in May. It lost 15% in the first half of 2026 after rising 141% last year. The September contract is currently down $0.129 (-0.22%) an ounce to $57.400 and the DG spot price is $57.07.
Spot palladium dropped 1.4% Tuesday to $1,277.00 an ounce but rose 1.6% in the first two days of the week. Palladium is up 4.8% this month after dropping 11% in June and losing 12% in May. It retreated 25% in the first half of 2026 after rising 74% last year. Currently, the spot price is down $21.70 an ounce to $1254.50.
Spot platinum declined 0.4% Tuesday to $1,620.90 an ounce but is up 1.3% this week. Platinum is up 4% this month after tumbling 19% in June and dropping 3.2% in May. Platinum slid 23% in the first half of 2026 after increasing 122% in 2025. The spot price is currently down $28.70 an ounce to $1592.60.
