Updated 28 October 2026: rewritten, expanded and fact-checked against the sources listed in the article.
Gold fell on 8 July 2026 after US President Donald Trump said the interim agreement meant to end the US-Iran war was “over”. Spot gold dropped as much as 1.4% to $4,049.92 an ounce in European trading, its lowest level since 2 July, according to a Reuters report carried by the New Straits Times. By 9:11 a.m. New York time it had trimmed the loss to 0.8% at $4,072.69, while US gold futures for August delivery were down 1.8% at $4,083.20, Reuters reported via Kitco.
The move cut against the usual safe-haven story. Oil jumped more than 5% on the news. Traders took higher energy prices to mean more inflation and a more hawkish Federal Reserve, and that tends to weigh on a metal that pays no interest.
Correction: an earlier version of this article said gold was trading “around $1,850 per ounce”. That was wrong by more than $2,000. COMEX gold futures settled at $4,082.40 on 8 July 2026, according to Yahoo Finance daily closing data.
What Trump said and why it mattered
The United States and Iran had been at war since 28 February 2026, when the US and Israel launched joint strikes on Tehran and other Iranian cities. A memorandum of understanding to end the fighting was signed on 17 June, Vatican News reported.
On 8 July Trump said the memorandum was over and that he did not want to engage further with Tehran. Trading Economics said he made the remarks at the NATO summit in Ankara. Iran’s Revolutionary Guards said they had targeted US bases in Bahrain and Kuwait. They cited US strikes on Iran and the revocation of a licence that had allowed Iran to sell oil. Reuters said the US strikes followed attacks on tankers in the Strait of Hormuz.
Rates, not just geopolitics
The bigger driver for gold that day was interest-rate expectations. CME FedWatch put the probability of a US rate hike in September at 67-68%, up from 62% a day earlier, according to Reuters. David Meger of High Ridge Futures told Reuters that risk assets across the board were trading lower, gold included. Nikos Tzabouras of Tradu.com said gold could stay under pressure and might set new lows for 2026.
Reuters also reported that Bank of America, in a note dated 7 July, cut its 2026 average gold price forecast by 14% to $4,360 an ounce because of a more hawkish Fed. The bank said $5,000 was still within reach once the tightening cycle ends. These are the bank’s forecasts, not ours.
The dollar was steady. The ICE US Dollar Index closed at 101.05 on 8 July, according to Yahoo Finance data. Our guide to the US Dollar Index (DXY) explains why a firmer dollar usually works against gold.
How far gold had already fallen
The July sell-off came on top of a steep decline from January’s record. COMEX gold futures closing prices from Yahoo Finance:
| Date | Gold futures close (USD/oz) | Note |
|---|---|---|
| 29 Jan 2026 | 5,318.40 | Highest close of 2026 (intraday high 5,586.20) |
| 30 Jun 2026 | 4,038.50 | End of Q2 |
| 8 Jul 2026 | 4,082.40 | Day of Trump’s remarks |
| 16 Jul 2026 | 3,992.10 | Lowest close of 2026 |
| 31 Aug 2026 | 4,481.50 | Late-summer rebound |
| 28 Oct 2026 | 4,056.60 | Latest close |
The World Gold Council’s benchmark figures tell the same story. The LBMA PM price averaged a record $4,872.90 in the first quarter. It averaged $4,506.29 in the second quarter, 8% lower than in Q1 but still 37% higher than a year earlier.
Demand: central banks bought, ETFs sold
The World Gold Council’s Gold Demand Trends report for Q2 2026, published on 30 July, showed:
- Total demand of 1,269 tonnes, unchanged from a year earlier. First-half demand of 2,522 tonnes was worth a record $380 billion.
- Central banks bought 289 tonnes, up sharply from a revised 57 tonnes in Q1.
- Gold ETFs had net outflows of about 45 tonnes.
- Bar and coin demand was 307 tonnes, roughly flat on the year.
- Jewellery volume fell to 278 tonnes, the lowest since the pandemic, although spending rose 14% to $40 billion.
Trading Economics also noted that China’s central bank made its largest monthly addition to gold reserves in more than two and a half years in June. In other words, official-sector buying stayed strong even as investment funds sold.
What happened next
Update, 28 October 2026: Tzabouras’s short-term warning proved right. Gold futures kept falling and settled below $4,000, at $3,992.10, on 16 July, the lowest close of the year. Prices then recovered to $4,481.50 by the end of August before slipping back to $4,186.70 at the end of September and $4,056.60 on 28 October. That is about 0.6% below the 8 July settlement and roughly 24% below January’s peak close.
The rate fears behind the July sell-off came true. The Federal Reserve raised its target range by 25 basis points to 3.75-4.00% on 17 September 2026. As of 27 October, CME FedWatch showed an 80% probability of another hike in December, according to Trading Economics. The Dollar Index closed at 102.43 on 28 October, close to its 2026 high close of 102.58 on 12 October.
The World Gold Council’s Q3 2026 Gold Demand Trends report had not been published when this update was written. It will show whether central-bank buying held up through the summer.
What to watch
- Fed policy: markets are pricing more tightening, which has been the main headwind for gold in 2026.
- Oil and the US-Iran conflict: on 8 July escalation pushed gold down through the oil and inflation channel, not up as a safe haven.
- Official buying vs ETF flows: central-bank demand has been the steadiest support. Watch the WGC quarterly data and monthly reserve reports.
For a broader framework, see our gold price outlook explainer. We also covered the follow-through in gold’s mid-July slide.
Sources
- Reuters via Kitco: Gold drifts lower after Trump says deal with Iran “over” (8 Jul 2026)
- Reuters via New Straits Times: Gold falls over 1pct as oil jumps (8 Jul 2026)
- Trading Economics: Gold falls to one-week low on Trump’s Iran remarks (8 Jul 2026)
- Vatican News: Iran-United States deal ending conflict signed (18 Jun 2026)
- World Gold Council: Gold Demand Trends Q2 2026 (30 Jul 2026)
- Federal Reserve: Open market operations, policy rate changes
- Yahoo Finance daily closing data for COMEX gold futures (GC=F) and the ICE US Dollar Index (DX-Y.NYB), retrieved 28 Oct 2026
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Explainer: Gold Price Outlook Explained: What Drives Gold and How to Read Forecasts
Corrections: An earlier version said gold was trading around $1,850 an ounce and called Donald Trump a former president. Gold was about $4,050-4,080 on 8 July 2026 and Trump was the sitting president. An unsourced monthly decline and a vague World Gold Council projection were replaced with dated data.
How this article was made: first published on 8 July 2026 as an AI-assisted rewrite of a news report (original report by Reuters: TradingView News). On 28 October 2026 it was rewritten and expanded with AI assistance, and its facts and figures were checked against the primary sources linked above; errors in the earlier version are listed above. How we work · Report an error
