Forex
Gold Price Plummets Amid Rising Interest Rates and Middle East Tensions
The gold price has had a volatile year so far in 2026. It hit a record high of $US5595 an ounce in late January, but then plummeted to a low of below $US4000 an ounce in July before recovering to just under $US4700 an ounce in late August.
The war in the Middle East and its impact on oil prices have been major contributors to gold's price fluctuations. The oil price has soared from about $US70 a barrel to more than $US100 a barrel, forcing petrol and diesel prices up by far greater amounts.
The US Federal Reserve has had to raise interest rates for the first time in over three years due to high levels of inflation. This has increased both the cost of holding gold and its opportunity cost, leading to a recent tumble in the price.