Gold prices dropped as much as 2% within two hours on Wednesday after President Donald Trump announced at the NATO summit in Ankara that an interim agreement with Iran was over and he no longer wished to engage with Tehran. The announcement unraveled a memorandum of understanding signed weeks earlier to end a four-month conflict, triggering oil prices to jump more than 5% and intensifying inflation concerns. The price movement occurred as Iran targeted US military sites in Bahrain and Kuwait following US strikes on Iranian targets in response to attacks on tankers in the Strait of Hormuz, with crude oil touching a two-week high and the US Dollar Index firming to its best level in about a week.
Iran Targets US Military Sites After Trump Ends Interim Agreement
Speaking at the NATO summit in Ankara, Trump stated he no longer wished to engage with Tehran, ending the memorandum of understanding signed weeks earlier. Iran responded by targeting US military sites in Bahrain and Kuwait after US forces struck Iranian targets in response to attacks on tankers in the Strait of Hormuz. Crude oil prices jumped more than 5% to a two-week high as traders bet the standoff will keep energy costs and inflation elevated longer. The US Dollar Index firmed to its best level in about a week.
Fed Minutes Show Split on Rate Direction Under New Chairman Warsh
The Minutes from Kevin Warsh's first FOMC meeting as the new Chairman of the Federal Reserve were released later on Wednesday. The meeting summary provided few details of what the new Chairman described as a "family fight" over policy direction. Of the eighteen policymakers who submitted year-end rate projections, nine penciled in at least one increase, eight saw no change at all, and one favored a cut. The Minutes cited tariffs, elevated energy costs, and lingering disruption from the Strait of Hormuz closure as forces keeping inflation elevated near-term, with risks still tilted to the upside. Warsh himself withheld a projection, the first sitting Chairman to do so since the Fed's dot plot began in 2012. The post-meeting statement had been trimmed to a terse pledge that "the Committee will deliver price stability."
Gold Confirms Death Cross as 50-Day Moving Average Falls Below 200-Day
Gold's 50-day moving average crossed below its 200-day counterpart on June 30, confirming a death cross that chart watchers view as a warning that momentum has turned firmly lower. This signal followed an earlier bearish crossover on May 11, when the 50-day slipped below the 100-day. Towards the end of Wednesday's session, crude oil gave back approximately half of its earlier gains, trading about 2.5% higher on the day. That retreat, along with the lack of a clearly hawkish slant in the Fed's Minutes, allowed gold to regain some of its earlier drawdown. Spot gold finished the day trading down $26, or 0.66%, and silver gave up 2.5% in value.
China Reports Largest Monthly Gold Reserve Increase in Over Two Years
China's central bank reported its largest monthly increase in gold reserves in more than two and a half years for June, underscoring that official-sector buying has continued even as prices correct. Bank of America lowered its 2026 average gold forecast by 14% to below $4,400 in a note released Tuesday, citing renewed inflation concerns, though the bank continues to see gold reaching $5,000 an ounce once the current tightening cycle concludes.
FAQ
What caused gold prices to drop on Wednesday?
Gold prices fell as much as 2% within two hours on Wednesday after President Donald Trump announced at the NATO summit in Ankara that an interim agreement with Iran was over, triggering oil prices to jump more than 5% and intensifying inflation concerns as Iran targeted US military sites in Bahrain and Kuwait.
How did Fed officials vote on future rate direction in the Minutes?
Of the eighteen policymakers who submitted year-end rate projections in Kevin Warsh's first FOMC meeting Minutes, nine penciled in at least one increase, eight saw no change at all, and one favored a cut, while Chairman Warsh withheld a projection—the first sitting Chairman to do so since the Fed's dot plot began in 2012.
What technical signal did gold confirm on June 30?
Gold's 50-day moving average crossed below its 200-day counterpart on June 30, confirming a death cross that chart watchers view as a warning that momentum has turned firmly lower, following an earlier bearish crossover on May 11 when the 50-day slipped below the 100-day.
