US Strikes on Iran Send Gold Prices on Wild Ride

Gold prices fluctuated on Wednesday as investors weighed in on fresh US strikes against Iran. The military action lifted oil and dollar prices, while concerns about inflation and higher interest rates persisted ahead of the Federal Reserve's June meeting minutes.

Spot gold rose 0.5% to $4,125.59 per ounce by 0305 GMT after dropping to its lowest since July 2 earlier in the day. US gold futures for August delivery shed 0.5% to $4,136.30.

The US military's new wave of strikes against Iran on Tuesday and revocation of a licence allowing the country to sell oil came as markets increased their bets for a September Federal Reserve rate hike to an over 63% chance, up from about 57% on Tuesday according to the CME FedWatch tool.

Investors await minutes of the Federal Open Market Committee's June 16-17 meeting for fresh clues on the interest rate path under Fed Chair Kevin Warsh. While gold is seen as an inflation hedge, high interest rates tend to weigh on non-yielding assets.