European Investor
07 Sep 2026, 10:22
Gold Falls to $4,403 Despite Escalating U.S.-Iran Conflict
Gold prices extended their decline on Monday as stronger U.S. labor data and rising expectations for a Federal Reserve rate hike outweighed safe-haven demand generated by the escalating U.S.-Iran conflict.
Spot gold traded at approximately $4,403.85 per ounce, down 0.50%. Friday’s stronger-than-expected U.S. jobs report remains the main source of pressure. The economy added 162,000 jobs in August, significantly above forecasts, while unemployment held at 4.1%. Traders were pricing roughly a 58% probability of a rate increase at the Fed’s September 15–16 meeting. Higher interest rates and Treasury yields tend to reduce the appeal of non-yielding gold.
Geopolitical risks, however, intensified over the weekend. U.S. forces struck three Iranian oil tankers on Saturday, while Iran retaliated by targeting vessels in and around the Strait of Hormuz. The escalation has raised concerns about disruptions to Middle Eastern energy supplies, helping push Brent crude toward $97 a barrel.
Normally, escalating military tensions would support gold through safe-haven demand. In this case, however, the conflict is also driving oil prices higher and increasing inflation concerns, which could reinforce the case for tighter Fed policy. For gold, that leaves geopolitical safe-haven demand competing with higher-rate expectations, with this week’s U.S. inflation data likely to determine which force dominates.
Gold prices extended their decline on Monday as stronger U.S. labor data and rising expectations for a Federal Reserve rate hike outweighed safe-haven demand generated by the escalating U.S.-Iran conflict.
Spot gold traded at approximately $4,403.85 per ounce, down 0.50%. Friday’s stronger-than-expected U.S. jobs report remains the main source of pressure. The economy added 162,000 jobs in August, significantly above forecasts, while unemployment held at 4.1%. Traders were pricing roughly a 58% probability of a rate increase at the Fed’s September 15–16 meeting. Higher interest rates and Treasury yields tend to reduce the appeal of non-yielding gold.
Geopolitical risks, however, intensified over the weekend. U.S. forces struck three Iranian oil tankers on Saturday, while Iran retaliated by targeting vessels in and around the Strait of Hormuz. The escalation has raised concerns about disruptions to Middle Eastern energy supplies, helping push Brent crude toward $97 a barrel.
Normally, escalating military tensions would support gold through safe-haven demand. In this case, however, the conflict is also driving oil prices higher and increasing inflation concerns, which could reinforce the case for tighter Fed policy. For gold, that leaves geopolitical safe-haven demand competing with higher-rate expectations, with this week’s U.S. inflation data likely to determine which force dominates.
