XAU/USD falls 1.44% as US-Iran clashes boost crude prices and reinforce expectations of a 50 bps Fed tightening by 2025.
Gold prices dropped Monday as escalating US-Iran hostilities drove crude oil higher and revived inflation concerns, strengthening bets on a Federal Reserve rate hike. XAU/USD fell 1.44% to $4,061 after hitting an intraday low of $4,045.
WTI crude rose 3.25% to $73.75, though off its session high of $74.96, while the US Dollar Index retreated below 101.00 after peaking at 101.22. Analysts noted stabilizing US labor data and persistent inflation keep Fed policy expectations hawkish.
Markets have fully priced in a 25 bps rate increase by year-end and nearly 50 bps of tightening over the next 12 months, pressuring non-yielding assets like gold.