US-Iran Conflict Sparks Gold Price Collapse Amid Escalating Tensions

The global financial markets experienced a significant shock on Tuesday as tensions between the US and Iran escalated following a series of strikes. The conflict pushed up oil prices, with West Texas Intermediate reaching nearly $90 per barrel, and US Treasury yields rising to 4.792%. This surge in yields led to a sharp decline in gold prices, with XAU/USD plummeting by over 2.30% to $4,342.

The increased uncertainty fueled by the Middle East conflict overshadowed mixed US economic data, including a lower-than-expected ISM Manufacturing PMI and steady hiring as shown by the Job Openings and Labor Turnover Survey (JOLTS) report. The Fed's Beige Book is due to be released soon, followed by jobs data and the ISM Services PMI for August.

From a technical perspective, gold's downtrend was accelerated by the conflict, breaching key support levels including the $4,400 figure and the 100-day Simple Moving Average (SMA) at $4,365. The Relative Strength Index (RSI), which was previously bullish, shifted bearish amid the vertical drop, indicating that sellers are gaining momentum.