ISTANBUL — The price of gold rose 1% in July to $4,046 per ounce, marking its first monthly gain in five months as expectations that the U.S. Federal Reserve may delay further interest-rate increases supported the precious metal.
Gold had come under pressure earlier in the year as higher oil prices and concerns over their impact on inflation strengthened expectations that central banks would maintain a hawkish stance. Stronger demand for the U.S. dollar, seen as a safe haven amid geopolitical tensions, also weighed on precious metals.
Fed expectations support gold
A slowdown in U.S. inflation and personal consumption expenditures increased optimism that the Fed would not rush to raise interest rates, providing support for gold prices.
Cautious comments from Fed Chair Kevin Warsh also increased uncertainty over the timing of future policy moves and weakened expectations of an interest-rate hike. The resulting decline in the dollar index further supported gold.
Gold had last posted a monthly gain in February, when it climbed 8.5%. It subsequently fell 11.3% in March, 1% in April, 1.8% in May and 11.7% in June.
Silver, meanwhile, declined 1.7% in July to $57.70 per ounce, pressured by continuing tensions in the Middle East and expectations that the Fed may keep interest rates elevated for an extended period.
Gold may trade in a limited range
Daniela Corsini, Senior Commodity Economist at Intesa Sanpaolo, said gold prices could move within a relatively narrow range over the next several months.
Corsini forecasts an average gold price of $4,200 per ounce in the third quarter of 2026, $4,000 in the fourth quarter, and $4,200 for 2027 as a whole.
She said the dollar and Fed monetary policy would likely remain the main drivers of gold prices in the near term. A further rise in energy prices caused by the war in Iran could increase inflationary pressures and potentially force the Fed to raise interest rates, strengthening the dollar and weighing on gold, which does not generate interest income.
Corsini added that gold is unlikely to retest its previous highs as long as markets expect the Fed to maintain tight control over inflation.
However, she said downside risks appear limited, pointing to $3,600-$3,800 per ounce as a strong support range, supported by geopolitical risks that continue to drive safe-haven demand and central banks’ efforts to diversify their reserves.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök