Gold Prices Plummet as US-Iran Conflict Escalates

Geopolitical tensions have sent shockwaves through the markets as the US and Iran exchange strikes, resulting in a sharp decline in gold prices. The conflict has sparked concerns about inflation, leading to higher oil prices and US Treasury yields.

The West Texas Intermediate (WTI) hit a high of $90.00 per barrel, with gains of over 4.20%, while the 10-year benchmark note rose nearly four basis points to 4.792%. This surge in oil prices has put pressure on gold, causing it to plummet over 2.30% to $4,342.

The escalation of the conflict also triggered hawkish remarks from Federal Reserve Chair Kevin Warsh, who reassured that if inflation remains stubbornly high, then the central bank has 'work to do.' This statement sent a strong signal to investors, with money markets now indicating a 71% chance of an interest rate increase and a 29% chance of rates remaining unchanged.

Gold's technical outlook is bearish, with the precious metal breaching key support levels, including the $4,400 figure and the 100-day Simple Moving Average (SMA) at $4,365. The Relative Strength Index (RSI) has also shifted from bullish to bearish, indicating that sellers are gaining momentum.