Gold holds near nine-week low as Hormuz tensions raise Fed hike bets Roushni Nair Wed, October 7, 2026 at 10:17 PM EDT 3 min read GC=F +0.60% DX-Y.NYB -0.04% SI=F +0.67% PL=F +1.39% USDIDX Investing.com -- Gold prices edged higher on Thursday after falling to their lowest level since early August, as renewed tensions around the Strait of Hormuz kept inflation risks elevated and reinforced expectations that the Federal Reserve could raise interest rates again this year.
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At 21:36 ET (01:36 GMT), XAU/USD rose 0.6% to $4,134.19 an ounce, while Gold Futures gained 0.4% to $4,158.30. XAG/USD rose 1% to $60.37, while XPT/USD climbed 1.7% to $1,661.28. The U.S. Dollar Index was little changed at 102.23.
Tehran has stepped up attacks on tankers crossing the Strait of Hormuz, adding to concerns over the security of a key global energy route.
The White House is also considering possible military strikes against Iranian targets ahead of the U.S. midterm elections in November.
While oil flows from the Middle East have recovered to near pre-conflict levels, the risks around the waterway have pushed shipping costs to record highs.
A tropical storm in the Gulf of Mexico was also putting further pressure on energy supplies, with MMA reporting that 25% of Gulf oil production had been shut.
The U.S.-Iran conflict has now run for more than seven months, and gold is down about 20% since the war erupted in late February.
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Surging energy costs have fueled inflation and contributed to tighter monetary policy, weighing on gold as a non-yielding asset.
Fresh pressure on gold came from the Federal Reserve's latest meeting minutes. All 19 policymakers supported September's rate increase, while most believed another increase would be appropriate by year-end.
Markets are now pricing roughly a 20% probability of an October rate hike, but an 80% chance of a hike by December.
Higher Treasury yields and a stronger dollar have also weighed on investor demand for gold.
The greenback was trading near its strongest level of the year, making dollar-priced bullion more expensive for buyers using other currencies.
Still, central bank demand has provided an important cushion. ANZ analysts said in a note that strong buying by central banks helped limit gold's losses even as higher bond yields and a stronger U.S. dollar pressured investor demand.
The People's Bank of China increased its gold reserves by 740,000 ounces in September, marking its 23rd consecutive month of accumulation. China, one of the world's largest gold buyers, has also accelerated purchases in recent months following the decline in prices, according to ANZ.
That continued official-sector demand is helping offset some of the near-term pressure from higher yields, a stronger dollar and renewed energy-driven inflation concerns.
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