US-Iran Tensions Drive Oil Prices Higher, Weigh on Gold

The US-Iran conflict has led to increased concerns over potential supply disruptions in the oil market. As a result, oil prices rose by 1.1% and 1.5% for West Texas Intermediate (WTI) and Brent crude respectively. The recent tanker attack in the Strait of Hormuz also added to these concerns.

The strength of the US dollar is another factor contributing to gold's decline. With a 66% probability of a September rate hike, expectations are high that the Federal Reserve will tighten monetary policy. This has weighed heavily on gold prices, which have fallen to near the $4,400 support level.

Markets are now focusing on upcoming US labor market data, including the Non-Farm Payroll (NFP) and ISM employment index. Strong data could reinforce Fed tightening expectations and put further pressure on gold. Conversely, weaker numbers could weaken the dollar and support a recovery in gold prices.