Business Recorder

WhatsApp X (Twitter) Facebook Telegram Link

Gold drops as oil and dollar rise on renewed US-Iran hostilities

Gold ​fell more than 1% on Wednesday to hit an 11-week low, as ‌the dollar and oil prices rose on renewed hostilities between the United States and Iran, fuelling concerns about inflation and interest rate hikes. Spot gold lost 1.8% to $4,187.59 per ounce by 0230 ​GMT, hitting its lowest level since March 23. U.S. gold futures for ​August delivery were down 1.7% at $4,213.40. The dollar rose, making greenback-priced bullion ⁠more expensive for holders of other currencies. Oil prices rose 1% , stoking concerns ​around inflation and cementing expectation that interest rates would stay higher for longer. “The driver ​really is the shift in Federal Reserve policy expectations, the rise in yields, and the rise in the dollar. I think all of those things are weighing on gold,” said Ilya ​Spivak, head of global macro at Tastylive. The United States on Tuesday launched strikes against ​Iran after President Donald Trump said Tehran had shot down a U.S. Apache helicopter in the ‌ Strait ⁠of Hormuz , deepening doubts over a potential peace deal and further straining a fragile truce. Traders are now pricing in a more than 70% chance of a Federal Reserve interest rate hike by December, according to the CME FedWatch tool. While gold is ​seen as a hedge ​against inflation, higher ⁠interest rates tend to weigh on the non-yielding metal. Markets are awaiting key U.S. inflation reports this week, including the May Consumer ​Price Index data later in the day and the Producer ​Price Index ⁠reading on Thursday, to gauge the Fed’s monetary policy stance. “If we can break the $4,100 level, I think the path of resistance fundamentally changes for gold, and we might ⁠be ​starting to look at $3,500 as the next level into ​the end of the year,” Spivak said. Spot silver fell 1.5% to $64.43 per ounce, platinum dropped 2.8% to $1,678.10, ​and palladium fell 0.8% to $1,212.31.

Google Play App Store