Gold prices fell on Wednesday to their lowest level in nearly a week, as U.S. strikes on Iran boosted oil prices and strengthened the U.S. dollar, raising concerns that inflation could keep interest rates higher for longer and weigh on the non-yielding precious metal.
Spot gold slipped 0.1% to $4,100.32 per ounce as of 01:07 GMT, after earlier falling to its lowest level since July 2. Meanwhile, U.S. gold futures for August delivery declined 1.1% to $4,112.50 per ounce.
The U.S. military launched a new wave of strikes against Iran on Tuesday, while Washington revoked a license that had allowed Iran to sell oil after three tankers came under projectile attacks in the Strait of Hormuz, adding further strain to an already fragile ceasefire.
U.S. crude oil prices rose by about 3% in early trading, extending gains from the previous session, while the U.S. dollar held near its highest level of the week against most major currencies.
According to the CME Group’s FedWatch Tool, markets now see more than a 67% probability that the U.S. Federal Reserve will raise interest rates in September, up from about 57% on Tuesday.
Investors are also awaiting the release later on Wednesday of the minutes from the Federal Open Market Committee (FOMC) meeting held on June 16–17, looking for fresh signals on the future path of interest rates under new Federal Reserve Chair Kevin Warsh.
Reuters
