Gold Falls on Iran Tensions, Higher Oil Prices, and Fed Rate-Hike Expectations

Gold prices have fallen to a three-week low due to renewed tensions between the US and Iran, which has pushed oil prices higher and fueled expectations of a Federal Reserve rate hike.

The recent escalation in the conflict between the two countries has led to a sharp increase in oil prices, with crude oil trading near recent highs at $94 a barrel. This rise in energy costs is feeding into inflation concerns, making it more likely that the Fed will raise interest rates.

Markets are pricing around a 70% probability of a Fed rate hike at the September 15 to 16 meeting, following hawkish comments from Federal Reserve Chair Kevin Warsh and warnings from Fed officials about entrenched inflation.

The stronger dollar and rising Treasury yields have also put downward pressure on gold prices, which have now fallen for four straight sessions. The precious metal has broken below its 200-day moving average, a key technical indicator of longer-term momentum.