Gold’s US-Iran Deal Bounce Is a Mirage—Fed’s October Hike Will Wipe It Out

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(SeaPRwire) –   By: Christian Pierce

Gold’s 1.2% jump after the US-Iran deal isn’t a win. The Fed’s rate hike threat is already eroding its gains. Investors should think twice before jumping in.

The US and Iran signed an interim deal Wednesday evening. It grants 60 days of toll-free passage through the Strait of Hormuz. Full traffic is expected back in 30 days. Gold rose to $4,307 an ounce Thursday. But Wednesday saw a 1.7% drop from a stronger dollar and rising yields. The Fed kept rates at 3.50-3.75% but 9 of 19 officials want a hike in 2026. Traders are fully pricing an October increase. New Fed Chair Kevin Warsh stressed fighting inflation. The dollar index edged higher Thursday, making gold pricier for non-US buyers.

Higher rates hurt gold—no interest means no returns. OCBC’s Wong said the Fed’s stance complicates gold’s outlook. TD’s McKay calls gold’s trend bearish. The deal’s short-term relief can’t overcome the Fed’s pressure. Gold’s upside is capped, and the next move is down.

Author bio: Christian Pierce, a chief financial columnist and markets commentator specializing in commodity trends and central bank policy impacts.