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Gold slides after US-Iran oil fears lift the US dollar and Fed bets
XAU/USD was last around $3,994, with the US Dollar Index near 100.7 and money markets seeing a 57% chance of an October rate hike.
Gold prices fell more than 1.8% as US-Iran tensions revived fears of an oil supply disruption, supporting higher energy prices and raising the risk of renewed inflation, FXStreet reported. XAU/USD was quoted near $3,994.
The same Middle East-driven backdrop also helped strengthen the US dollar, FXStreet said. The DXY was around 100.74, up about 0.24%, while oil-linked correlations were highlighted as West Texas Intermediate was up more than 13% in July.
US economic data and central bank commentary further reinforced the shift toward tighter policy expectations. FXStreet cited retail sales up 0.2% month over month in June, initial jobless claims at 208K for the week ending July 11, and the Beige Book describing the labor market as “modest, moderate or solid gains,” while Fed regional bank presidents Lorie Logan and Jeffrey Schmid leaned hawkish.
Treasury yields drifted higher, with the 10-year note rising nearly 3 basis points to 4.577%, FXStreet added. Money markets are pricing a 73% chance of a July rate hold and a 57% chance for an October rate hike as gold hit a new 13-day low near $3,974, leaving room for further downside toward lower support levels.
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