Gold Under US$4,000 as Trump Talks Iran Strikes

Key Takeaways

• Trump has raised the prospect of another US operation against Iran.
• Renewed fighting could lift oil prices and keep inflation harder to shift.
• Gold has slipped below US$4,000 an ounce after a 4% weekly fall.

What Trump said

Donald Trump says the US may carry out another military operation against Iran. Speaking at a rally in Fort Myers, Florida on Friday 23 October 2026, he said, "We may do another little Epic Fury," without giving too much detail (Times of Israel). He also noted he might take care of Cuba on the way back. Earlier this month, he had said the US would not attack before the 3 November midterm elections (Guardian, 8 October 2026).

Why oil is the first concern

For markets, one of the first concerns is oil. More fighting could disrupt supplies and push fuel prices higher, particularly if Iran responds by targeting shipping or nearby infrastructure. Brent crude settled at US$116.72 a barrel on 23 October 2026 (CNBC). That would add to costs for households and businesses already dealing with expensive energy.

It would also make life harder for central banks. Higher oil prices can keep inflation elevated, reducing the chance of rate cuts and potentially bringing further increases into play. Investors will be watching whether Trump's comments lead to action or become another round of threats followed by negotiations.

Where gold sits

Gold has struggled through this uncertainty. Rising energy prices and expectations of higher US interest rates weighed on the market last week, with prices falling through US$4,000 to end at US$3,995.81 an ounce, down 4.12% (Kitco, 23 October 2026), or A$5,680.44 (XAU/AUD close). A recovery that holds above US$4,000 would be encouraging. Continued trading below it could bring more selling as traders cut positions.

Some of that selling may also come from investors needing cash elsewhere. When shares or other investments fall, gold can be sold to cover losses or meet margin calls. Saxo Bank's Ole Hansen has pointed to the competing pressure from short-term sellers and longer-term buyers whose demand remains firm. BCA Research's Roukaya Ibrahim reads the drop as a one-off tied to cross-asset liquidity, not a shift in gold's outlook (Kitco).

The Federal Reserve meets on 27–28 October, with no increase expected at this meeting (Kitco). Even if rates stay unchanged, its comments on inflation could move gold. An easing of tensions with Iran could help by taking some pressure off oil prices. More strikes would leave the Fed facing another potential jump in energy costs, just as gold buyers try to establish a floor around US$4,000, a line that matters more to traders than to long-term holders (Ainslie Bullion charts).

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This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.