Gold Prices Plunge as US-Iran Tensions Fuel Rate Hike Fears
Gold prices fell to their lowest level in over three weeks on Wednesday as tensions between the US and Iran escalated, fueling fears of higher interest rates. The escalating conflict has led to a surge in oil prices, which has added to inflation concerns.
The spot price of gold dropped 0.6% to $4,304.01 per ounce, its lowest since August 7. This is the fourth consecutive session of losses for gold, and it remains below its 200-day moving average. US gold futures for December delivery also fell 1% to $4,350.80.
The US dollar held firm, making greenback-priced metals more expensive for buyers using other currencies. The increased uncertainty has driven up Treasury yields, which could limit any potential rebound in gold prices.
Bas Kooijman, CEO and asset manager of DHF Capital, stated that the rebound in oil prices due to renewed US-Iran tensions added to inflation concerns. He also noted that higher interest rates would weigh on gold's appeal as it offers no yield.