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Informist, Thursday, Jul. 9, 2026

 

MUMBAI – Gold prices are expected to remain range-bound in the near term as expectations of rate hikes persist, according to a report by research consultancy Metals Focus Ltd. Gold has faced sustained pressure since the start of the US-Iran war, with prices slipping below $4,000 per ounce for the first time since November. This comes as rising inflationary concerns have led to expectations that the US Federal Reserve will hike interest rates at least once before the end of 2026. Hawkish commentary by the Federal Open Market Committee after the June policy meeting has further reinforced this view, according to the report.

 

"...it will be difficult for prices to break decisively out of this range before the market begins to scale back expectations of further policy tightening, perhaps during the latter part of Q3 (Jul-Sept)," according to the report. Subsequently, the consultancy expects resumption in the rally in gold prices with the view that the US Fed is more likely to keep policy rates unchanged.

 

US President Donald Trump's recent remarks that the peace agreement with Iran was "over" might result in higher energy prices. Even if the peace agreement between the two parties materialises and the Strait of Hormuz is reopened, normalisation of traffic is expected to take time, doing little to ease concerns about inflation, according to the research consultancy. Moreover, the artificial intelligence boom is also exacerbating inflation worries due to unprecedented demand for energy, semiconductors, and data centres.

 

Expectations of a rate hike are further fuelled by resilience in the US labour market, Metals Focus said in its report, despite a weaker-than-expected US jobs report for June and downward revisions to May's data. The US dollar and treasury yields are expected to remain high, culminating in a "meaningful opportunity-cost headwind" for gold investment in the near term, according to the report.

 

Cooling in retail investment across major markets led to a demand slowdown in physical markets over recent months despite a pickup in early 2026. "Losses following the January rally, together with recent range-bound prices have discouraged many individual investors," Metals Focus said. Further, several key markets have been heavily impacted by higher oil prices, which have brought down disposable incomes. The report also highlighted that elevated prices and weak consumer sentiment have weighed on jewellery demand for some time.

 

Meanwhile, gold purchases by central banks have improved after a decline towards the end of the March quarter. The surge in official sector sales during the early stages of the US-Iran conflict proved temporary. With dollar liquidity already up following gold sales and swaps, the need for further liquidations has diminished, according to the report.

 

The research consultancy also expects factors that supported gold throughout 2025 to persist in the near term. US policy uncertainty, concerns about the longevity of the US dollar, and elevated geopolitical risks would underscore the role of gold as a safe-haven asset and portfolio diversifier, according to the research consultancy.

 

At 1724 IST, the most-active August gold futures on COMEX were 0.8% higher at $4,115.90.  End

 

US$1 = INR 95.39

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shruti Nair

Edited by Avishek Dutta

 

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