TLDR
- Gold dropped 0.7% to $4,030 an ounce as oil prices kept inflation fears alive
- U.S. producer prices fell 0.3% in June, beating expectations, but markets looked past the data
- Renewed U.S. strikes on Iranian targets pushed crude prices higher for a fourth straight day
- Fed officials, including Chair Kevin Warsh, stressed commitment to the 2% inflation target
- Markets now await Fed speeches for clues on the next interest rate move
Gold extended its losses on Thursday as rising oil prices kept inflation concerns front and center, overshadowing a surprise drop in U.S. producer prices.
At 06:05 ET, gold fell 0.7% to $4,030.37 an ounce. Gold futures slipped 0.4% to $4,037.10. Silver dropped 1.7% to $56.78, and platinum fell 0.6% to $1,667.20.
The moves came despite data showing U.S. producer prices fell 0.3% in June, well below expectations for no change. That followed softer consumer inflation data earlier in the week.
Together, the reports suggested price pressures were easing. But investors chose not to act on it.
Oil Prices Renew Inflation Concerns
The reason was crude oil. Renewed fighting in the Middle East pushed oil prices higher for a fourth straight session.
BREAKING: June PPI Inflation falls to 5.5%, below expectations of 6.2%.
Core PPI Inflation fell to 4.7%, below expectations of 5.2%.
Month-over-month PPI inflation fell -0.3%, the biggest decline since April 2025.
The odds of rate hikes are declining further.
— The Kobeissi Letter (@KobeissiLetter) July 15, 2026
The United States carried out a fifth consecutive day of strikes on Iranian targets. President Donald Trump vowed to keep up military operations until Tehran stops attacks on commercial shipping and reopens the Strait of Hormuz.
Brent and West Texas Intermediate crude both extended gains as markets watched for supply disruptions through the key waterway.
Higher oil prices raise the risk that inflation stays above the Fed’s 2% target. That could force the Fed to keep interest rates elevated longer than markets had hoped.
ANZ noted that the key question is whether the Fed sees the oil price rise as a temporary shock or a broader inflation risk.
Fed Officials Stay Cautious
Fed Chair Kevin Warsh said this week that policymakers remain committed to bringing inflation back to 2%. He said the Fed would adjust rates if price pressures prove more stubborn.
Warsh also pushed back on the idea that heavy investment in artificial intelligence would, on its own, drive inflation higher.
Fed Governor Lisa Cook said she would support further policy action if inflation stays elevated. New York Fed President John Williams said current rates were “well positioned” to bring inflation back toward target.
Analysts at MUFG said gold’s near-term outlook will depend on whether rising oil prices feed into U.S. inflation or stay a short-lived geopolitical shock.
Markets are now watching for upcoming Fed speeches to get more direction on where interest rates are headed.
Higher Treasury yields and a stronger dollar, both possible outcomes if the Fed stays on hold, tend to weigh on gold by making it more expensive for overseas buyers and reducing its appeal as a non-yielding asset.
Gold has so far held above the $4,000 level, but continued pressure from oil markets and a cautious Fed could test that floor in the sessions ahead.
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