US-Iran Tensions and Rate Hike Bets Weigh on Gold Prices
Gold prices fell as bets on an imminent interest rate hike by the US Federal Reserve (Fed) increased, and tensions between the US and Iran continued to escalate. Fed Chair Kevin Warsh's hawkish comments at the Jackson Hole Symposium last Friday contributed to the growing expectation of a rate hike.
The CME Group's FedWatch Tool shows that traders are now pricing in around a 65% chance that the Fed will raise borrowing costs at its upcoming policy meeting on September 15-16. This, combined with rising energy prices and geopolitical uncertainties, has strengthened the safe-haven US Dollar (USD).
US-Iran tensions remain high, with the US striking rocket launchers on Iran's Larak Island in the Strait of Hormuz on Sunday. Iran retaliated with a counterattack on American air bases in Jordan, and further military action remains possible.