Gold prices have been under pressure this year. A stronger U.S. dollar and the Fed’s hawkish stance continue to weigh on its prices.
Note that the Fed enacted the first rate hike of this year in September. There are expectations of another Fed rate hike this year. However, rising geopolitical tensions could support bullion by boosting safe-haven demand.
While the prospect of another U.S. interest-rate hike may limit near-term gains, expectations that the Fed could avoid further tightening in 2027 may help support gold prices over the longer term, per Bloomberg, as quoted on Yahoo Finance.
Fed Policy Could Determine Gold’s Next Move
Rising oil prices, driven by renewed attacks on vessels in the Strait of Hormuz, have added to concerns about energy supply disruptions and persistent inflation. Higher energy costs could complicate the Federal Reserve’s efforts to contain inflation.
New York Fed president John Williams indicated that another rate hike may be appropriate this year, while suggesting that additional tightening may not be necessary in 2027.
This outlook creates a mixed environment for bullion. Higher interest rates generally weigh on gold because the metal does not generate interest income, making interest-bearing assets more attractive. However, if investors begin anticipating an end to the tightening cycle, gold could regain support as the opportunity cost of holding the metal becomes less of a concern.
Oil Prices Contribute to Another Layer of Uncertainty
Developments in the Middle East could also influence gold’s performance. Renewed attacks on vessels in the Strait of Hormuz have heightened concerns about global energy supplies, supporting oil prices and increasing the risks of another inflationary shock.
Gold could benefit if escalating geopolitical tensions prompt investors to seek safe-haven assets. Sustained increases in energy prices could push inflation higher, potentially encouraging the Fed to maintain restrictive monetary policy for longer, whereas further disruptions to energy supplies could support investor interest in precious metals.
Gold ETFs to Watch
Gold ETFs may remain sensitive to policy expectations and developments in the Middle East. Rather than assuming that rising oil prices will automatically lift bullion due to increased safe-haven demand, investors should watch whether inflation risks translate into higher interest-rate expectations, which could weigh on the metal price.
Against this backdrop, take a look at the below-mentioned gold ETFs.
SPDR Gold Shares GLD is designed to track the price of gold bullion,. The fund fell more than 4% in a month (as of Oct. 14, 2026).
GLD has assets under management worth 142 billion and an expense ratio of 0.40%. The fund trades at a three-month average volume of 9.17 million shares.
iShares Gold Trust IAU is a physically backed gold ETF that primarily depends on gold prices, interest-rate expectations and geopolitical developments. The fund fell 4.6% in a month (as of Oct. 14, 2026).
IAU has assets under management worth 62.17 billion and an expense ratio of 0.25%. The fund trades at a three-month average volume of 5.13 million shares.
SPDR Gold Minishares Trust GLDM aims to reflect the price of gold bullion and gives investors gold-price exposure without requiring them to buy and store gold themselves. The fund dropped more than 4% in a month (as of Oct. 14, 2026).
GLDM has assets under management worth 31.08 billion and an expense ratio of 0.10%. The fund trades at a three-month average volume of 4.48 million shares.
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SPDR Gold Shares (GLD): ETF Research Reports
iShares Gold Trust (IAU): ETF Research Reports
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This article originally published on Zacks Investment Research (zacks.com).