Gold Slips Amid Higher Rate Hike Odds and Escalating Oil Tension

The gold price has slipped to $4,438.20 an ounce as traders weigh higher September Fed-hike odds against defensive demand tied to fresh U.S.-Iran escalation.

Fed Chair Kevin Warsh's hawkish Jackson Hole message pushed the two-year Treasury yield nearly 12 basis points higher on Friday, with futures-implied odds of a September rate hike near 60% on Monday.

The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations, and defensive demand. U.S. forces struck Iranian rocket launchers near the strait Sunday, breaking a lull in the more than six-month war. Oil surged over 3% as traders repriced escalation risk, with Brent crude trading near $91 a barrel.

The setup is conflicted for gold: fresh military action supports safe-haven demand, but higher crude threatens to keep inflation elevated and strengthens the market's case for another Fed hike.