Gold Price Volatility Spikes Amid US-Iran Tensions
Gold prices have been fluctuating on Wednesday as investors weigh the impact of US strikes on Iran. Spot gold rose by 0.5% to $4,125.59 per ounce, but earlier in the day it dropped to its lowest point since July 2. Meanwhile, U.S. gold futures for August delivery shed 0.5% to $4,136.30.
The US military's strikes against Iran have led to a surge in oil prices, with a nearly 3% jump in early trade. This has also caused the dollar to strengthen, reaching its highest levels of the week against most major currencies.
Markets are now more likely to see a Federal Reserve rate hike in September, with an over 63% chance, up from about 57% on Tuesday. The minutes of the Federal Open Market Committee's June 16-17 meeting are due later today and are expected to provide further clues on the interest rate path.
Gold is often seen as a hedge against inflation, but high interest rates tend to weigh on non-yielding assets like gold. Spot silver rose by 0.8% to $60.47 per ounce, while platinum slipped 0.3% to $1,635.45 and palladium dropped 0.6% to $1,268.64.