Gold Prices Slump Amid US-Iran Conflict and Higher Oil Costs

The price of Gold has been falling due to a narrative dominated by the US-Iran conflict and higher Oil prices. The US-Iran conflict is putting pressure on the global economy, which is causing inflation concerns. This is prompting traders to focus on US inflation data, which could lead to further tightening of monetary policy and push Gold prices lower.

The US Department of Labor will release Initial Jobless Claims for the week ending September 5, providing insight into the labor market's health. The Consumer Price Index (CPI) is expected to be released next, with a target of 0.4% MoM or 3.4% YoY, and core figures seen at 0.2% MoM and 2.4% YoY.

Money markets have priced in a 63% chance of a 25-basis-point rate hike by the Federal Reserve (Fed) at next week's meeting. If July's data exceeds expectations, it could open the door for further tightening, which would be bearish for Gold prices.