Gold Holds Near $4,020 as Geopolitical Risks and Fed Expectations Shape Market Sentiment

VG Markets · 2026-07-20T09:30:47Z
Gold Holds Near $4,020 as Geopolitical Risks and Fed Expectations Shape Market Sentiment

Gold traded little changed on Monday, with spot gold (XAU/USD) rising 0.1% to $4,020.63 per ounce and U.S. gold futures gaining 0.8% to $4,030.20. Investors continued to assess geopolitical developments alongside expectations for the Federal Reserve's upcoming policy decision.

Silver outperformed, with XAG/USD advancing 1.8% to $56.97 per ounce, while platinum added 0.2% to $1,598.45.

Several factors remained in focus:

  1. Brent crude traded above $90 per barrel following renewed tensions involving the United States and Iran. According to media reports, recent military actions included attacks affecting regional energy infrastructure and shipping activity near the Strait of Hormuz.
  2. Iranian officials said the previous U.S.-Iran ceasefire was no longer in effect, contributing to ongoing uncertainty surrounding one of the world's most important oil shipping routes.
  3. The conflict has continued for several months, while uncertainty surrounding U.S. policy toward Iran has remained a focus for global financial markets.

Federal Reserve outlook

Higher energy prices have added uncertainty to the inflation outlook, even as recent U.S. inflation and labor market data pointed to moderating economic conditions. Higher interest rates generally support Treasury yields and the U.S. dollar, increasing the opportunity cost of holding non-yielding assets such as gold.

According to ANZ, market-implied odds of a Federal Reserve rate hike at the July 29 meeting briefly rose to around 40% during last week's escalation before easing to approximately 10%. The change suggests that interest rate expectations have become an important factor influencing recent gold price movements.

ANZ said it continues to expect the Federal Reserve to keep interest rates unchanged through 2026, arguing that policymakers may look beyond energy-driven inflation unless it broadens into wider price pressures. The bank also said it expects gold to find support in the $3,800–$4,000 per ounce range under its base-case outlook.

Gold has continued to trade near the $4,000 level following a 14% decline in the second quarter, reflecting the influence of higher interest rate expectations alongside continued safe-haven demand.