Gold falls as Iran tensions boost USD
Gold prices slid back toward $4,050 as escalating tensions between the US and Iran lifted crude oil prices and revived inflation fears.
The US-Iran conflict and the closure of the Strait of Hormuz triggered a fresh leg up in crude oil prices, fueling concerns about energy-driven inflationary pressures.
This, in turn, bolsters expectations of elevated interest rates by the US Federal Reserve, which benefits the safe-haven US Dollar and drives flows away from gold.
Traders are currently pricing in a nearly 90% chance of a Fed rate hike by the end of this year, according to the CME Group’s FedWatch Tool.