Oil prices surge, gold tumbles amid Middle East hostilities and supply fears

Oil prices experienced a significant jump as Iran intensified attacks on Gulf states in retaliation for U.S. strikes, raising concerns about energy shipments via the crucial Strait of Hormuz. The official price of Oman crude oil for September 2026 delivery rose $2.82 to $72.11 per barrel, while Brent crude futures climbed 3.08 percent to $78.35 and West Texas Intermediate crude gained 3.09 percent to $73.62.

This escalation has cast doubt on the interim U.S.-Iran agreement, which aimed to reopen the strait and end the war through further negotiations. The conflict's impact on oil supply has revived expectations of potential interest rate hikes by the Federal Reserve to counter inflationary pressures, leading to a decline in gold prices.

Meanwhile, gold prices fell more than one percent at the start of Asian trading. Spot gold dropped 1.2 percent to $4,072.78 per ounce, and U.S. gold futures for August delivery decreased by 0.8 percent to $4,081.70. Silver, platinum, and palladium also saw declines.

Investors are now awaiting key U.S. economic data, including consumer prices, producer prices, and retail sales for June, alongside Federal Reserve Chair Kevin Warsh’s testimony. These indicators will provide crucial signals regarding the U.S. economy and the future path of monetary policy.