Commodities
Middle East Flare-Up Fuels Rate-Hike Bets, Gold Stabilizes
A recent escalation of tensions in the Middle East has led to an increase in bets on interest rate hikes by the Federal Reserve, causing gold prices to stabilize after a two-day decline.
The US and Iran exchanged strikes for the first time in a month, with American forces hitting an island in the Strait of Hormuz and the Islamic Republic responding with attacks on the United Arab Emirates and Jordan.
The conflict has heightened concerns over rising energy costs, which could lead to higher inflation and prompt the Fed to raise interest rates. This typically has a negative impact on gold, as it carries no interest.