Gold prices came under renewed pressure at the beginning of the week, according to Business Today, as yet another skirmish between the US and Iran sent oil prices sharply up on Monday. At the time of writing, the yellow metal was trading with a hefty daily loss of 2.6% at $4013 spot. In the week ending July 10, the metal closed with a weekly loss of 1.3% at $4121 as risk to oil supplies returned with a fresh round of armed conflict between Iran and the US.
Geopolitical Drivers: US-Iran Conflict and Oil Supply Risks
The US and Iran continue to engage in a series of attacks and counterattacks over the control and management of the Strait of Hormuz. Iran has claimed that the vital Strait of Hormuz has been closed, though the US disputes this claim. Iran's IRGC warned Monday of further incidents should the US's interference continue. Iran has warned vessels not to sail without its authorization. US President Trump announced Monday on Truth Social that the US will again begin blocking ships coming in and out of Iran and will charge a rate of 20% on all cargo shipped to do the job of providing safety and security for ships transiting through the Strait. As per Bloomberg estimates, a 20% charge would work out as about $32 million on a supertanker at current oil prices, which is far higher than the estimated $2 million tolls that would have been charged by Iran. Ship-tracking data from Kpler showed just six vessels passed through the strait on Sunday. Consequently, Brent crude oil futures rose over 4% on supply concerns.
Macroeconomic Factors: Dollar and Yields Push Higher
The Dollar Index at 101.11 was up 0.15% for the day, adding pressure on gold. Two‑year yields at 4.25% were up 0.95% as yields hit the highest since February 2025, whereas ten‑year yields at 4.60% reached the highest level since May 21 and were up 0.87%. Fed Vice Chair for Supervision Michelle Bowman said the Financial Stability Board should encourage "flexibility" to ensure oversight is appropriate for individual jurisdictions. She warned against enforcing strict rules. Federal Reserve Governor Christopher Waller, expressing concerns over elevated prices of Core Inflation, said Monday policymakers may need to raise rates in the near term if underlying inflation continues to signal broad price pressures.
Central Bank Demand: China Extends Buying Streak
In a supportive fundamental, China's central bank added 15 tons of gold to its reserves in June, extending its gold-buying streak to a 20th straight month. Central banks globally added 41 tonnes of gold to their official reserves in May as they continue to buy gold for strategic purposes including diversification, geopolitical risks and fiscal worries. The World Gold Council (WGC) reported that the National Bank of Poland has accumulated 82 tonnes during the first half of 2026 as the central bank took advantage of lower prices to build its reserves.
ETF and COMEX Inventory Trends
| Metric | Value | Change / Context |
|---|---|---|
| Total known global gold ETF holdings (July 10) | 96.57 MOz | Highest since July 1; down 2.38 MOz YTD; down 4.35 MOz since Iran war start (Feb 28) |
| Registered COMEX inventory of gold | 14.76 MOz | Lowest since October 4, 2024 |
| CFTC net-long positions (week ending July 7) | 114,854 | Decrease of 1,963 net-long positions by money managers |
Outlook for Commodity Traders
Given the on‑/off‑again nature of the US-Iran conflict, gold remains highly sensitive to headlines, according to Praveen Singh, Head of Currencies and Commodities at Mirae Asset ShareKhan. The sharp rise in yields and a hawkish Fed tone could cap upside, while continued central bank buying provides a floor. Traders will watch Fed Chair Warsh's testimony before the House Financial Services Committee and Senate Banking Committee on July 14 and July 15, respectively. Additionally, the sharp drop in COMEX inventory and ETF outflows amid geopolitical tensions suggest potential for further volatility.
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