XAU/USD falls 1.3% to $4,059 as Middle East risks lift the US Dollar and Treasury yields, fueling inflation concerns.
Gold prices slid 1.3% to $4,059 as heightened Middle East tensions strengthened the US Dollar. President Trump’s warning on Iran derailed diplomatic progress, lifting crude oil prices over 3% to $74.50 and reviving inflation fears.
The US Dollar Index (DXY) rose 0.10% to 101.20, while the 10-year Treasury yield climbed 8.5 basis points to 4.589%. Swaps markets now price in 27 basis points of Federal Reserve tightening by year-end, though July rate hike odds remain low at 35%.
Traders await the Fed’s latest meeting minutes, led by Kevin Warsh, for further policy clues. The non-yielding metal faces pressure from rising yields and a stronger USD.