Gold falls to near £2,950 an ounce as US-Iran conflict drives oil and rate-hike fears

Gold has fallen to around £2,950 per troy ounce, or roughly £95 per gram, down about £270 from a month ago when it touched near £3,220. In US dollar terms, the metal slid from $4,330 in mid-June to near $3,972 by 17 July (these sterling figures are approximate, based on an exchange rate near 1.347).

The drop looks puzzling on the surface. The US-Iran military conflict that has escalated through July would normally push money into gold as a safe haven. This time, the same crisis has pressed the metal lower. The explanation lies in oil: US strikes on Iranian targets and Tehran's moves to restrict tanker traffic through the Strait of Hormuz sent crude prices sharply higher, adding to inflation worries. With oil driving inflation expectations up, markets are now pricing roughly a 51% chance of another Federal Reserve rate rise in September. Because gold pays no income, it tends to lose appeal when rate expectations rise and the US dollar strengthens, both of which occurred this month.

Silver has also eased, trading near $55 an ounce, roughly £41, as industrial demand concerns add to the broader metals pullback.

Gold remains about 20% above its level a year ago. For UK buyers, the all-in cost, which is the spot price plus the dealer premium plus any delivery or storage fees, is the most useful comparison across sellers. This is not financial advice.