US-Iran Conflict Crushes Gold Rally as Rate Hike Bets Rise

Gold prices have erased most of their recent gains due to the ongoing US-Iran conflict and tightening financial conditions. The prolonged conflict has pushed oil prices higher, while traders are increasing their bets on a rate hike by the Federal Reserve.

The market is waiting for a de-escalation in the conflict, which would lead to a dovish repricing of gold and trigger a relief rally. However, as long as the conflict continues, the tightening in financial conditions will keep pressure on the market.

There's also concern that the Fed could surprise with a rate hike at its upcoming July meeting if the situation in the Middle East doesn't improve. While this is seen as low-probability, a rate hike would likely push gold prices into new lows.