Gold Struggles as September Rate Hike Odds Rise to Two-Thirds

The price of gold continues to face headwinds as the probability of a September rate hike by the Fed rises. The December gold futures contract opened at $4,135.20 per troy ounce on Monday, up 0.7% from Friday's settlement, but quickly rolled over and slipped to $4,111.50 by 7:58 a.m. ET.

The catalyst for the price movement was President Trump's announcement of negotiations with Iran and the subsequent de-escalation of tensions in the region. However, this news had a muted impact on gold prices, which is unusual given that safe-haven assets typically rally during times of conflict.

Experts point out that the Iran conflict has been bearish for gold in 2026, rather than bullish. Higher crude oil prices have fed inflation expectations, which in turn have driven up rate projections and crushed non-yielding metals like gold.

The Fed's decision to hold rates steady at its July meeting was a key factor in the rise of September hike odds. The committee voted 9-3 to hold rates, with all three dissenters favoring an immediate hike.

Meanwhile, Deutsche Bank is maintaining its bullish stance on gold, predicting that it will reach $4,700 per ounce by year-end. The bank's models point to a fair value well above spot prices and suggest that the current explosive phase of price behavior will persist.