XAU/USD falls 1.8% to $3,994 as rising oil prices and strong US data fuel expectations of tighter monetary policy.
Gold prices retreated 1.8% to $3,994 as escalating US-Iran tensions drove oil prices higher, stoking inflation fears and bets on a Federal Reserve rate hike. The XAU/USD pair dropped alongside a 0.24% rise in the US Dollar Index (DXY), which climbed to 100.74.
WTI crude oil surged over 13% in July, reinforcing concerns about persistent inflation. US retail sales grew 0.2% in June, matching expectations but slowing from May’s 1% gain, while jobless claims fell to 208K, below the forecasted 217K. Treasury yields edged higher as markets priced in potential Fed tightening.
The Fed’s Beige Book noted strong labor market conditions, with districts reporting modest to solid employment gains, further supporting hawkish expectations.