Gold Slips as Hormuz Tensions Keep Rate Hike Bets Elevated
The price of gold fell to around $4,265 an ounce on Monday as tensions over the Strait of Hormuz remained high, keeping energy costs elevated and maintaining pressure on the US Federal Reserve to raise interest rates further.
The impasse between Iran and the United States is entering its eighth month, with Brent crude up 70% in 2026 so far. Cleveland Fed president Beth Hammack said that long-term Treasury yields are being driven higher by a stronger growth outlook, concerns about government debt, and expectations for additional interest rate increases.
The US Federal Reserve raised its benchmark interest rate by a quarter percentage point mid-September, with several officials pointing to signs that more rate hikes may be needed. Investors see about a 65% probability of a hike in October, which could further support the price of gold.