Gold fell to its lowest level in two weeks on Tuesday as the conflict involving Iran triggered a sharp rise in oil prices, heightening concerns over inflation.
Spot gold slipped 0.2% to $3,993.83 per ounce by 01:10 GMT, after losing nearly 3% in the previous session—its largest one-day percentage decline in more than a month. U.S. gold futures for August delivery were little changed at $4,000.70 per ounce.
The U.S. military continued its strikes against Iran for a third consecutive night on Monday, while two tankers came under fire in the Strait of Hormuz, after President Donald Trump announced that Washington would resume its naval blockade of Iranian shipping in the Gulf.
Oil futures climbed to their highest levels since mid-June after surging nearly 9% in the previous session. At the same time, U.S. Treasury yields and the U.S. dollar strengthened as renewed conflict between the United States and Iran unsettled financial markets at the start of the week.
Investors are closely watching the release of the U.S. Consumer Price Index (CPI) for June later on Tuesday for fresh signals on inflation and the Federal Reserve’s interest-rate outlook. Attention is also focused on June Producer Price Index (PPI) data and Federal Reserve Chair Kevin Warsh’s first semiannual testimony before Congress later this week.
Federal Reserve Governor Christopher Waller said on Monday that the central bank may need to raise interest rates “in the near term” if upcoming data show inflation remains well above the Fed’s 2% target, describing monetary policy as being “at a crossroads.”
Traders have increased their expectations for a U.S. interest-rate hike in September, with the CME FedWatch Tool indicating a 78% probability of a rate increase, up from 57% a week earlier.
Among other precious metals, spot silver fell 1.2% to $56.98 per ounce, after earlier touching a two-week low. Platinum declined 1% to $1,589.35 per ounce, while palladium slipped 0.4% to $1,242.54 per ounce.
Source: Reuters
