Gold Slumps Amid Renewed Hawkish Fed Sentiment and US-Iran Tensions

Gold prices are struggling to recover after hitting three-month highs of $4,697. The precious metal is currently trading at $4,430.16 and faces significant support from the US Federal Reserve's hawkish stance on interest rates.

Fed Chair Kevin Warsh signaled that rate hikes may be necessary to contain inflation, sparking a surge in bets for a September rate hike. Markets now see a 57% chance of such a move, up from 39% a week ago, according to the CME Group's FedWatch Tool.

Renewed tensions between the US and Iran have driven oil prices higher and reignited inflation fears, supporting the case for a Fed rate hike next month. This has limited gold's recovery attempts, as the metal remains vulnerable to further downside due to its inverse correlation with risk assets.