Gold’s Recovery Accelerates as Iran Conflict Overwhelms Rate-Hike Headwinds
Published on 07/23/2026 at 03:42 | Redaktion boerse-global.de
Gold prices extended their rebound on Wednesday, climbing 1.91% to settle at $4,159.80 an ounce and pushing the seven-session gain to 4.51%. The move marks a decisive break away from the psychologically critical $4,000 floor, which had been tested in late June when bullion briefly dipped below that threshold.
The rally’s primary engine remains the escalating military confrontation in the Middle East. US forces conducted strikes in Iran for the 11th consecutive night, with President Trump threatening to target bridges and power plants if Tehran continues attacking vessels in the Strait of Hormuz. Brent crude surged past $95 a barrel, its highest level since June, amplifying the geopolitical risk premium that has drawn investors into gold as a safe haven.
Yet the relationship between rising energy costs and gold is not straightforward. Ricardo Evangelista, an analyst at ActivTrades, noted that while the conflict fuels haven demand, higher oil prices simultaneously complicate the inflation outlook and central bank policy — a dynamic that could ultimately cap gold’s upside. For now, however, the geopolitical factor is overriding the usual headwinds. Ten-year US Treasury yields are trading above 4.6%, and Brent has cleared $93, yet gold has held its ground, a sign that the Iran conflict has temporarily suspended the typical inverse correlation between bullion and yields.
The dollar’s retreat after four days of gains provided additional support, making gold cheaper for buyers outside the US currency zone. Lukman Otunuga of FXTM pointed out that the breakout above $4,140 triggered follow-through technical buying. The 50-day moving average sits at $4,265.93, roughly 2.5% above current levels, and analysts at finanzmarktwelt.de identify the $4,200 mark and that moving average as the next resistance targets.
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Fed Uncertainty Creates Crosscurrents
Market attention is now trained on the upcoming Federal Reserve meeting. While surveys suggest the central bank will hold rates steady for now, expectations for a September hike have climbed to around 76% probability, according to one poll. This creates a tension: higher rates typically weigh on gold by boosting the opportunity cost of holding the non-yielding metal, but the overriding geopolitical risk is keeping buyers engaged.
A Reuters analysis cited by Jordan News outlines three potential paths for gold in the second half of 2026: a bullish scenario involving peace in the Middle East and a looser Fed; a bearish scenario driven by energy-led inflation forcing rate hikes; and a neutral trajectory. For now, the conflict remains the dominant variable.
On the diplomatic front, a ten-day ceasefire proposal brokered by Qatar, Egypt and Pakistan is on the table. Should it gain traction, the geopolitical risk premium could quickly evaporate. But until that happens, the military escalation continues to dictate the narrative.
Divergent Views on Where Gold Heads Next
The recovery from January’s record high near $5,600 to the recent trough around $4,000 has split the analyst community. Wells Fargo strategist Sameer Samana warns of short-term downside risk to $3,500 but argues the risk-reward ratio has become compelling: a potential $500 setback is balanced against $1,500 of upside. His year-end 2026 target sits between $5,300 and $5,500, rising to $5,800–$6,000 in 2027.
Other houses offer a range of forecasts: Deutsche Bank sees $4,800 for 2026, Goldman Sachs $4,900, and ANZ $5,600 by year-end. Schroders expects near-term pressure from Fed policy but believes the market will digest negative factors within three to six months, allowing structural central bank demand to reassert itself.
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A Bank of America survey of fund managers provides a contrarian signal: net 6% of respondents consider gold undervalued — the first negative reading since March 2023, which historically has preceded a market bottom. Former BlackRock manager Ed Dowd goes further, predicting gold could reach $10,000 by 2030 amid an unfolding credit crisis.
Central Banks Remain Structural Buyers
Institutional demand continues to underpin the market. China’s central bank is still adding to its gold reserves, and a World Gold Council survey shows numerous central banks planning further purchases. Notably, gold has overtaken US Treasuries as the largest official reserve asset globally, accounting for 27% of central bank reserves versus 22% for Treasuries.
The picture is more mixed on the retail side. Physical bar demand in China has softened noticeably, and jewelry prices have eased — evidence that private investors have turned cautious after the correction from January’s highs. But with sovereign buyers still accumulating and the geopolitical backdrop showing no signs of cooling, the institutional bid looks likely to remain intact for the foreseeable future.
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