Gold: “In No Man's Land”

The escalation in the Middle East and weak U.S. inflation data created conflicting pressures on the gold market. Michael Blumenroth sees gold caught between geopolitical risks, falling interest rate expectations, and the upcoming central bank meetings.

July 16, 2026. FRANKFURT (Xetra-Gold). The “summer slump”—feared by many market observers—seems to be approaching by leaps and bounds. This refers to a period that is often relatively uneventful on the markets, as many market participants—instead of hunching over their screens—are indulging in idleness in the mountains or on the beach while on vacation. Next week, with the exception of two federal states, all the others will be on school break—if I’m not mistaken—the World Cup will be over, the tour of the greatest band in music history, Iron Maiden, will be on hiatus for the summer, and you’d have to search high and low to find any marathon events.

Escalation in the Middle East and U.S. Inflation Data Drive the Markets

This emerging summer lull could explain this week’s somewhat sluggish trading activity. After all, we’ve had at least two “hot topics” in the markets over the past few days: first, the renewed escalation of hostilities in the Middle East, and second, inflation data from the U.S. Developments in the U.S.-Iran conflict have had the same effects we’ve seen in recent weeks: First and foremost, all traders and analysts are watching oil prices, which have been rising steadily and significantly for nearly two weeks now. This has led to renewed fears of rising inflation, higher bond yields, and a general tailwind for the U.S. dollar.

Weaker inflation data eases interest rate concerns

The inflation data from the U.S. had exactly the opposite effect: Both consumer and producer price inflation in June were noticeably below forecasts, which in turn brought relief to the markets and led to the pricing out of potential near-term interest rate hikes by the U.S. Federal Reserve (Fed). This, in turn, resulted in lower U.S. yields and a slightly weaker U.S. dollar.

Opposing Forces Keep Gold Price Within a Narrow Range

Ultimately, these two developments at least partially offset each other, resulting in gold trading within a relatively narrow range throughout the week. The headwinds may have grown slightly stronger overall, as the U.S. inflation data pertain to June, and with oil and gasoline prices currently higher, inflation could rise again in July.

Gold Price Trends Over the Course of the Week

While gold prices were still trading at around 4,105 U.S. dollars per ounce on Thursday morning of last week, they rose later that same day to their weekly high of about 4,138 U.S. dollars. With the resurgence of hostilities in the Middle East and the sharp rise in oil prices, prices fell from the start of trading on Monday to around $3,985 on Tuesday night. US inflation data then triggered a spike to $4,100 on Tuesday afternoon. Since then, gold prices have been unable to settle on a clear direction but are trading above the $4,000 mark. As of Thursday morning, gold is trading at around $4,030.

Xetra Gold Price Moves in Tandem with the Euro

The Xetra Gold price traded relatively in line with the Euro, as the EUR/USD exchange rate was not particularly volatile either: During regular trading hours, it rose from 115.50 Euros per gram last Thursday morning to around 116.20 Euros on Thursday afternoon. After closing the week at 115.50 Euros, it fell on Monday afternoon to a weekly low of around 112.85 Euros. Following a brief rise back above the 115.00-Euro mark after the release of U.S. inflation data, the Xetra Gold price opened at around 113.85 Euros this Thursday morning.

Outlook: Central bank meetings could provide new momentum

In the coming days, developments in the Middle East and their impact on oil prices could continue to set the tone. However, many central banks—including the ECB and the Fed—are also scheduled to meet through the end of July. Perhaps this will bring some excitement back to the financial markets.

I wish all readers a wonderful weekend and, hopefully, a good start to their summer vacation.

By Michael Blumenroth, July 9, 2026 © Deutsche Börse AG