Gold Seeks to Break Three-Day Losing Streak Amid Geopolitical Tensions

Gold prices stabilized near $4,370 an ounce on Wednesday, attempting to snap its three-day losing streak. The precious metal found support from geopolitical tensions and a weaker US dollar, but traders remain cautious due to elevated Treasury yields and renewed expectations for a Federal Reserve hike.

The escalation of Middle East conflicts, including attacks on Saudi cities, Iranian tankers, and a US base in Jordan, has driven up oil prices and created uncertainty. This, in turn, is supporting gold as investors seek protection from potential conflict and disruption to energy infrastructure.

However, expensive oil also poses a threat to gold's appeal, as it could keep inflation elevated and force the Fed to raise interest rates or maintain them at higher levels. The recent surge in US 10-year Treasury yields to around 4.81% has made bonds more attractive than bullion for investors.

The focus will be on Friday's consumer-price report, which is expected to show a 0.4% month-over-month increase in headline CPI and a 0.2% rise in core inflation. A hotter-than-expected report could strengthen the case for a September Fed hike and lift yields, extending gold's slide.