Rising geopolitical risks in the Middle East push oil higher, increasing Fed rate hike pressure and weighing on gold.
Gold August futures fell to $4,487 at 7:04 a.m. ET, down from a flat open of $4,520. The decline follows escalating Middle East tensions, including clashes between Israel and Hezbollah and U.S.-Iran exchanges, which lifted oil prices and stoked inflation concerns.
The metal’s one-year gain stands at 33.5%, its lowest in over a year, down from 95.6% on January 29. Over the past month, gold has dropped 2.5%, though it remains up 1.8% week-over-week.
Higher oil prices and rising U.S. pump costs are seen as headwinds for gold, increasing expectations of Fed rate hikes to curb inflation.