Gold Prices Plummet Amid Middle East Tensions and Rising Interest Rates
Gold prices fell on Monday as market participants weighed developments in the Middle East and their implications for inflation and interest rates. The tensions between Iran and the US, with President Donald Trump warning of economic consequences or regime change if a deal isn't made, have investors focused on geopolitics and oil.
US gold futures were down 0.8% at $4,391.50 after spot gold fell 0.5% to $4,354.30 per ounce by 0648 GMT. This comes as some of the world's top central banks have raised rates in recent weeks, including the Bank of Japan on Friday, the Federal Reserve earlier that week, and the European Central Bank the week before.
Tim Waterer, chief market analyst at KCM Trade, said gold may trade in a roughly $4,200 to $4,580 range in the near term. He noted that for gold to gain meaningful upside traction, a clear move lower in oil and/or bond yields is likely required.