US Military Strikes Iranian Oil Tankers, Gold Falls Below $4350 Amid Rate Hike Fears
The U.S. military's destruction of five Iranian oil tankers in the Persian Gulf has sent shockwaves through global markets, driving international oil prices toward $100 per barrel and heightening inflation concerns.
The sudden escalation of hostilities between Iran and the U.S. has increased the likelihood of deeper disruptions to global crude supply, pushing energy market risk premiums higher, according to senior financial market analyst Kyle Rodda.
Gold prices have fallen for three straight trading days, breaking below $4,350 per ounce, as rate-hike expectations intensify ahead of the Fed's policy meeting on September 15-16. Market traders now assign a 60% probability to a rate hike announcement this month, up from approximately 50% before last week's jobs data.
The sharp rise in energy costs directly increases the risk of a rebound in prices and has led to increased expectations for a Federal Reserve rate hike. The yield on the 10-year U.S. Treasury note climbed to 4.8%, further diminishing the appeal of non-yielding gold.