Gold Tumbles Below $4,040 as Rates Take Center Stage

Gold prices continued their downward trend, breaking below the $4,040 support level and reaching as low as $4,025 an ounce during Asian trading. This marks a fresh leg lower in the session for the precious metal, which had earlier touched a two-week high above $4,150.

The decline is attributed to shifting expectations around inflation and interest rates, rather than any easing of geopolitical tension. Despite the intensifying conflict, investors are pricing in tighter monetary policy due to rising oil prices and higher Treasury yields.

This dynamic has consistently outweighed gold's traditional safe-haven appeal throughout the conflict. As a result, gold has struggled to sustain rallies even as tensions escalate, with its direction dictated by inflation and rate dynamics rather than headlines from the Red Sea or Strait of Hormuz.