Gold price retreats from two-week high as oil nears $100, silver down 4%

Gold and silver fell sharply on Thursday as a fresh escalation in the Middle East war pushed oil prices toward $100 a barrel, hardening bets that the Federal Reserve will resume raising interest rates as soon as next week.

Comex gold for August delivery fell as much as 2.6% to $4,042.50 an ounce on Thursday morning, and was trading at $4,050.80, down 2.4%, as of 11:45 a.m. in New York. The retreat snapped two days of dip-buying gains that had carried bullion to a two-week high of $4,165.87 on Wednesday.

Silver fell harder, with the September contract dropping as much as 4.9% to $57.32 an ounce before paring the loss to trade at $57.82, down 4.1%.

Yemen’s Iran-backed Houthis opened a new front in the war by targeting two Saudi oil tankers in the Red Sea, while the US and Iran exchanged strikes for a 12th consecutive day. Oil rallied more than 5% toward $100 a barrel and two-year Treasury yields rose for a sixth straight session, a combination that leaves the non-yielding metals exposed. Rate swaps now price roughly a one-in-three chance that the Fed raises rates at next week’s meeting, with a hike fully priced in for September, Bloomberg reports.

This week’s bounce was driven by “short covering and dip buying, after technical supports held during the preceding selloff,” rather than any aggressive build-up of new long positions, Bart Melek, global head of commodity strategy at TD Securities, said in a note. With rates rising, gold “may be destined to drop back to support at around $3,900 an ounce,” Melek said, seeing resistance at $4,200.

Bullion has lost about a fifth of its value since the US and Israel launched strikes on Iran in late February, a selloff that ended the multiyear bull run that carried the metal to a record near $5,600 in January. Gold is now down 6.1% in 2026, hovering above the $4,000 level some traders see as key support. Silver, which peaked at a record $85.73 on January 12, trades about a third below its high.

Miners follow

Precious metals equities tracked the metals lower in New York morning trade. Newmont fell 1.4%, Agnico Eagle 1.8%, Barrick 1.1%, Kinross 2.2%, AngloGold Ashanti 2.4% and Gold Fields 2.9%, while Wheaton Precious Metals shed 1%. Producers with silver exposure were hit hardest, with Coeur Mining down 3.5%, Pan American Silver 2.2% and Hecla 2%.

(With files from Bloomberg)