10.06.2026 10:00
As US strikes on Iran escalate risks in the Middle East, gold is experiencing a surprising decline. Inflation fears triggered by rising oil prices have raised the likelihood of a Fed rate hike to 70%. Under the pressure of a strong dollar, spot gold fell to $4,173, prompting the question in markets: 'Where is the bottom of this decline?' Analysts highlight the $4,107 threshold as all eyes turn to US inflation data.
Following the US military strikes against Iran, geopolitical risks in the Middle East have escalated, causing market-disrupting developments in global markets. Under normal circumstances, gold, expected to rise as a "safe haven" during such crises, has sharply declined as the Fed has withdrawn its interest rate hike weapon and the dollar has strengthened. While spot gold tested its lowest levels in recent months, domestic gram gold also plummeted.
TENSION HITS HORMUZ, OIL TRIGGERS INFLATION
The US strikes targeting Iranian territory have brought the already fragile ceasefire in the region to the brink of collapse. Concerns that shipments may halt in the Strait of Hormuz, the heart of global energy trade, have pushed oil prices up by over 1%. However, the rise in oil has sparked fears of a new wave of inflation in global markets. This fear has turned all eyes directly to the US Federal Reserve (Fed).
FED SIGNALS "INTEREST RATE HIKE"...
According to analysis by Ilya Spivak, Head of Global Macro at Tastylive, the collapse in gold is driven not by the geopolitical crisis but by the Fed's monetary policy. Markets, believing that the increase in oil prices will fuel inflation, have begun pricing in not just the Fed "keeping rates high" but also raising them again.
According to CME FedWatch data, investors in futures markets see a probability of over 70% that the Fed will implement a new interest rate hike by December. It has become inevitable that gold, which yields no interest income, loses its appeal in an environment where global interest rates are set to rise.
CURRENT MARKET STATUS IN NUMBERS
Under pressure from a strengthening dollar index and rising US Treasury yields, the gold market recorded the following figures:
- Spot Gold: Hit a low of $4,173.15 during the day, making a bottom. It then attempted to stabilize at $4,174, with a loss of 2.03%. Moreover, gold slipping below its 200-day moving average, considered a red line for institutional investors, further accelerated technical selling.
- Gram Gold: In line with the spot price, domestic gram gold sharply declined, testing the 6,190 TL level at midday before trading around 6,260 TL.
CRITICAL DATA AWAITED: WHERE IS THE BOTTOM OF THE DROP?
According to technical analysis, if the downward breakout in spot gold continues, the $4,079 - $4,107 band stands out as the most critical support zone. In the event of possible reaction buying, the first resistance will be at $4,199, followed by the $4,228 - $4,246 range.
The market's direction will be determined by US inflation data due this week. The CPI data for May will be released on Wednesday (today), and the PPI data on Thursday.
"LOSS-MAKING FUNDS MAY ACCELERATE SELLING"
Suki Cooper, Head of Global Commodities Research at Standard Chartered, also noted that volatility will spike in the short term. Cooper emphasized that if institutional investors caught with high costs in gold-backed exchange-traded funds (ETFs) seek to close (liquidate) their loss-making positions, the selling wave in the market could become much more destructive, potentially pulling gold rapidly to the psychological support level of $4,100.