XAU/USD falls 0.7% amid renewed energy price pressures and heightened US-Iran tensions, weighing on non-yielding assets.
Gold prices declined 0.7% to near $4,030 in European trading Thursday, pressured by rising inflation fears tied to disrupted oil supplies. A drone attack on an Iraqi oil terminal suspended crude loading, stoking concerns over prolonged energy price spikes.
The incident follows escalating US-Iran tensions, with President Trump threatening military action if negotiations fail. Higher energy costs risk unanchoring inflation expectations, potentially prompting tighter monetary policy and reducing demand for non-yielding assets like gold.
However, easing Fed rate hike bets may cushion losses. Odds of a July hike fell to 10.2% from 24.6% a week ago, per CME FedWatch, as US inflation cooled in June.