NEW YORK / RankWire.AI / – Gold dropped about 3% on Monday, July 13, falling below $4,000 an ounce as oil prices surged and expectations for higher U.S. interest rates strengthened. Spot gold fell to $3,996.76 per ounce, its lowest level in two weeks. U.S. gold futures for August delivery settled 2.6% lower at $4,005.70. The decline marked gold’s steepest daily percentage loss in more than a month.
Precious metals markets track oil prices, inflation and US rate expectations.
Crude oil climbed about 5% after renewed strikes involving the United States and Iran raised concern about shipping through the Strait of Hormuz. President Donald Trump announced the reinstatement of a naval blockade on Iran after Tehran said it had closed the waterway. The oil increase lifted inflation concerns across financial markets. U.S. Treasury yields and the dollar also rose, adding pressure on dollar-priced gold and other precious metals.
Gold pays no interest, which can reduce its appeal when bond yields and rate expectations rise. CME FedWatch showed traders assigning about a 75% probability to a Federal Reserve rate increase by September. That compared with roughly 57% one week earlier. At its June meeting, the Federal Reserve maintained the federal funds target range at 3.5% to 3.75%, while officials continued monitoring inflation and broader economic conditions.
Rate expectations reshape gold trading
Gold prices recovered part of Monday’s decline during early trading on Tuesday. Spot gold rose 0.5% to $4,021.62 per ounce, while August U.S. gold futures gained 0.6% to $4,028. The rebound followed two consecutive sessions of losses. Gold remained close to the $4,000 level as traders reviewed energy prices, interest-rate expectations and scheduled U.S. economic releases affecting the outlook for inflation.
The U.S. Bureau of Labor Statistics placed the June Consumer Price Index on Tuesday’s economic calendar. The agency scheduled the June Producer Price Index for Wednesday. The Federal Reserve calendar also listed Chair Kevin Warsh’s semiannual monetary policy testimony before the House Financial Services Committee on Tuesday. His appearance before the Senate Banking Committee followed on Wednesday. The reports and hearings formed the week’s main scheduled U.S. economic events.
Precious metals track broader market pressure
Other precious metals also declined during Monday’s trading. Silver fell 3.8%, platinum dropped 1.7% and palladium lost 2.1%. Early Tuesday, silver edged 0.1% higher to $57.70 per ounce. Platinum slipped 0.1% to $1,603.72, while palladium gained 1.4% to $1,264.61. The figures showed a limited recovery across the precious metals market after the broad losses recorded during the previous session.
The front-month Comex gold contract settled Monday at $3,997, down $107.10, or 2.61%. That marked its largest one-day decline since June 24 and its second-lowest settlement of 2026. The contract stood 7.6% lower for the year and remained 24.9% below its January high of $5,318.40. The Federal Reserve’s next scheduled policy meeting will take place on July 28 and July 29.