Gold prices stabilized on Wednesday, October 21, 2026, as conflicting reports about the Iran war's resolution created uncertainty over inflation and the Federal Reserve's interest rate policies. Bullion was trading at approximately $4,115 an ounce, marking a more than 1% decline since the start of the week. Oil prices remained steady after retreating from a five-month high the previous day, following a diplomat's statement that reports of a near agreement to end the conflict were inaccurate.
The US-Iran conflict, which began in late February 2026, has driven up energy prices and stoked inflation concerns. Gold has lost about a fifth of its value since the conflict started, as higher borrowing costs weigh on the non-interest-bearing asset. Long-term Treasuries rose on Tuesday, supported by a pullback in oil prices and signs of a weakening US economy, with September housing starts falling and pending home sales hitting a record low.
Traders are closely watching the Federal Reserve ahead of its meeting next week. Chair Kevin Warsh's recent speech did little to alter expectations of steady interest rates, with the probability of a quarter-point hike at less than one-in-six. However, inflation remains well above the Fed's 2% target, and traders see an 85% chance of another rate increase later in the year.
Spot gold fell 0.2% to $4,117.83 an ounce at 8:08 a.m. in Singapore, while silver dropped 0.1% to $57.88. Platinum and palladium also saw slight declines. The Bloomberg Dollar Spot Index showed minimal change after a 0.2% decline in the prior session.