US-Iran Tensions Spark Gold Price Drop Amid Rising Inflation Concerns
Gold prices fell to their lowest level in two days on Tuesday as tensions between the US and Iran intensified, pushing oil prices higher and reviving inflation concerns.
The metal dropped 1.6% to $4,379.84 an ounce, with gold futures declining 1.2% to $4,430.26. Silver prices fell 2.6% to $64.85 an ounce.
Federal Reserve Chair Kevin Warsh's hawkish speech at Jackson Hole last week has led markets to raise expectations for another rate increase, with the CME FedWatch tool showing a 66% probability of a 25 basis point hike in September.
Treasury yields climbed to their highest level since early 2025, while Brent crude oil prices rose above $92 a barrel and US crude surpassed $87. The renewed pressure has left gold vulnerable ahead of the Fed's next meeting, according to Tony Sycamore, senior market analyst at IG.
Despite the latest selloff, gold's broader August gains remain intact, with the metal coming off nearly 10% gains after the US Treasury increased purchases of longer-dated government debt. Gold-backed ETFs recorded strong inflows, and central bank buying provided support to the metal.