Gold Stabilizes Near $4,440 Amid US-Iran Tensions and Rate Hike Worries
Gold prices stabilized near $4,440 as market participants grappled with renewed US-Iran tensions and concerns over interest rate hikes. The precious metal had earlier dropped more than 3.5% in two consecutive trading days.
The recent escalation of clashes between the US and Iran sent oil prices soaring, which is a double-edged sword for gold investors. Geopolitical uncertainty can boost demand for gold as a safe-haven asset, but rising energy costs may intensify inflation pressures, prompting further tightening by the Federal Reserve.
Markets now price in more than a 60% chance of a rate increase at the upcoming Federal Open Market Committee meeting on Sept. 15-16. This has weighed on gold's prospects, as the metal typically becomes less attractive when interest rates rise.