Gold Tumbles Amid Escalating US-Iran Conflict
Gold prices plummeted to their lowest in over three weeks on Wednesday as tensions between the US and Iran escalated, pushing up oil prices and fueling rate-hike fears.
The spot price of gold fell by 0.6% to $4,304.01 per ounce at 0017 GMT, marking its lowest since August 7. The decline is now in its fourth consecutive session, with the metal remaining below its 200-day moving average, a closely watched technical indicator.
The increase in oil prices was largely driven by the recent US airstrikes against Iran, which prompted Iranian retaliation and raised concerns about inflation. This, in turn, has led to expectations of tighter monetary policy and higher interest rates, making gold less attractive as an investment.
'A rebound in oil prices after renewed US-Iran tensions added to inflation concerns,' said Bas Kooijman, CEO of DHF Capital SA. 'A pricier crude could continue to tighten monetary policy expectations and drive yields higher, limiting any rebound potential for gold.'