Gold Prices Plunge Amid Escalating Middle East Tensions

Gold prices hit a three-week low on September 2 due to escalating Middle East tensions and rising oil prices. The conflict between the US and Iran led to increased inflation concerns, causing investors to focus on upcoming US jobs data.

The spot gold price fell by 0.6% to $4,302.99 per ounce, its lowest since August 7. US gold futures for December delivery dropped 1.1% to $4,349.90. The US dollar remained strong, making metals more expensive for buyers using other currencies.

Bas Kooijman, CEO of DHF Capital S.A., stated that 'a rebound in oil prices after renewed US-Iran tensions added to inflation concerns.' He noted that higher interest rates weigh on gold's appeal due to its lack of yield. Investors are pricing in a 67% chance of a rate hike at the Federal Reserve's policy meeting in September.

Traders are awaiting the ADP employment report, scheduled for later in the day, and the nonfarm payrolls data on September 4. Softer figures could ease pressure on gold, while stronger data or more hawkish Fed comments may extend its decline.