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Gold slips toward weekly loss as Middle East tensions revive Fed hike fears
Gold is headed for a weekly decline despite a modest bounce from a late-2025 low, while markets price a 58% chance of a September rate increase ahead of next week’s US CPI.
Gold traded on the back foot and struggled to extend prior gains, with prices setting up for a weekly loss as renewed hostilities in the Middle East boosted fears of energy driven inflation and a Federal Reserve rate hike, according to FXStreet.
The metal also lacked follow through selling as traders weighed reports that technical talks involving the US and Iran are continuing despite military clashes, which coincided with a pullback in crude oil.
FXStreet said gold has traded less like a traditional safe haven since the US Iran war began in February and more like a rate sensitive asset, with price action tied to hawkish repricing of Fed interest rates. That dynamic has left gold with its worst quarterly performance in 13 years after a two year rally pushed prices to a record near $5,600 in January.
Looking ahead, FXStreet noted the outlook remains tilted to the downside, given the fragile geopolitical backdrop and expectations the Fed will keep policy restrictive to return inflation to its 2% target. The piece cited the CME FedWatch Tool showing markets pricing a 58% chance of a rate increase at the September meeting, and pointed to next week’s US CPI release as a key driver for rate expectations.
Latest closeGold $4,131.40 ▲1.5%|WTI crude $71.84 ▼2.3%