Gold Crashes to Four-Week Low Amid Escalating Iran Conflict
Gold prices have dropped to a nearly four-week low, falling below $4,300 amid a bearish fundamental backdrop. The escalating Middle East conflict has lifted crude oil prices to a fresh high since July 24, stoking inflation fears and reinforcing US Federal Reserve rate hike bets.
The tensions between the US and Iran reignited following a US strike on Iranian rocket launchers near Larak Island in the Strait of Hormuz on Sunday. This was the first US strike since late July, prompting an Iranian counterattack on US-linked targets in the region.
Investors are worried that elevated energy prices will rekindle inflationary pressures and force major central banks to adopt a more hawkish stance. Fed Chair Kevin Warsh's comments at the Jackson Hole Symposium on Friday have fueled expectations of a rate hike in September.