US-Iran Conflict Sparks Gold Price Plunge Amid Inflation Fears
The United States and Iran have escalated their conflict in the Strait of Hormuz, leading to a sharp decline in gold prices. The US launched airstrikes on southern Iran, prompting retaliatory Iranian strikes on US bases in Bahrain, Jordan, and Iraq. The conflict has raised energy prices, fueled inflation fears, and pushed borrowing costs to multi-decade highs.
US President Donald Trump denied reports that the latest strikes were aimed at forcing Iran back to the negotiating table, stating 'I couldn't care less if they [Iran] sign a worthless, to them, agreement.' Iranian officials signaled further attacks, with Supreme Leader Mojtaba Khamenei saying the Iranian armed forces have 'unforgettable lessons' in store for Washington.
The gold price has fallen for a fourth straight session and is down roughly 8% from last week's high near $4,700. The decline coincided with escalating U.S.-Iran tensions, which pushed global bond yields higher and reinforced expectations that the Federal Reserve may need to raise interest rates to contain inflation.