Gold breaks above $4,650 as Fed signals, Iran sanctions keep metals in focus
Gold’s third straight weekly gain comes as softer yields and a weaker dollar support bullion, while Iran sanctions and oil prices could determine the next move for metals.
Attention now turns to this week's Core PCE data and Kevin Warsh's Jackson Hole debut for clues on how much inflation the Fed is willing to tolerate. (AI Image)
Gold extended its rally on Monday, pushing above $4,650, while silver eased slightly after its recent run-up. Attention now turns to this week’s Core PCE data and Kevin Warsh’s Jackson Hole debut for clues on how much inflation the Fed is willing to tolerate.
“The Fed has stayed quiet through the Iran escalation, so the key question is whether higher oil prices are viewed as a temporary supply shock or a broader inflation risk that delays easing, and that’s really the swing factor for metals here, not safe-haven buying,” says Kaynat Chainwala, AVP – Commodity Research, Kotak Securities.
This follows a third straight weekly gain, with gold closing above $4,600 for the first time since mid-May, up about 5% on the week, and silver up 7% before settling near $69. The move was driven by the macro side as Treasury Secretary Bessent’s plan to step up buybacks of long-dated debt and a new fiscal initiative to tackle borrowing costs, coming right after US debt topped $40 trillion. That sent long-term yields sharply lower and the dollar to a two-month low near 98.5, even against a hawkish set of Fed minutes.
Tonight’s Iran sanctions briefing feeds directly into that macro picture. A tougher package could push oil higher and firm up rate-hike odds, capping metals while a package that largely formalises existing restrictions, especially alongside softer inflation data, would ease that pressure and support further gains in gold and silver this week.
Brent eased toward $92/bbl and WTI slipped to $84.7/bbl on Monday, both pulling back from last week’s multi-week highs as investors booked profits ahead of Treasury Secretary Scott Bessent’s briefing on Washington’s Iran economic isolation plan. The move looks tactical rather than fundamental as shipping through the Strait of Hormuz remains well below pre-conflict levels, keeping a geopolitical floor under prices even as sentiment cools into tonight’s briefing.
“The sanctions threat is already showing up in physical markets as Chinese purchases of Iranian crude fell sharply in August, and unsold cargoes are reportedly building up near Southeast Asia as US enforcement disrupts deliveries. That’s kept traders focused on whether Washington’s measures specifically target major buyers like China, and whether enforcement is strong enough to meaningfully curb export volumes rather than just raise costs,” said Chainwala.
The briefing itself is the swing factor. A package that targets Iran’s remaining buyers, logistics networks and payment channels could lift Brent decisively above $95/bbl. One that largely formalises existing restrictions, by contrast, could open the door to further near-term downside, especially with the tactical pullback already underway heading into tonight.
