XAU/USD gains 0.92% as Middle East conflict fuels inflation concerns, raising odds of Federal Reserve tightening.
Gold prices climbed 0.92% to $4,013 as escalating US-Iran tensions drove energy costs higher, stoking inflation fears. The metal hit a daily low of $3,959 before rebounding amid reports of additional US military support for Israel.
Market sentiment soured despite a recovery in US equities, with investors pricing in a higher risk of Federal Reserve rate hikes. Cleveland Fed President Beth Hammack warned of persistent inflation, while Vice Chair Philip Jefferson signaled openness to further tightening if disinflation stalls.
Money markets now price a 61% chance of a Fed rate increase, reflecting heightened concerns over inflationary pressures from geopolitical risks.