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Gold slips as Middle East escalation lifts the US dollar
Gold is trading around $4,011 an ounce, while the US 10-year Treasury yield rises toward 4.598% and the dollar index strengthens.
Gold prices edged lower Monday, slipping about 0.19% as hostilities between the US and Iran extended after a short-lived ceasefire that was broken nine days ago, FXStreet reported. At the time of writing, XAU/USD was around $4,011.
FXStreet linked the move to the escalation in the Middle East, which is also pushing higher energy prices and raising fears about potential oil supply disruptions. In parallel, US military actions near the Strait of Hormuz continued for a ninth straight day, and Iran responded with attacks on US military assets in Gulf states, while an Iran-linked group declared a naval blockade on Saudi Arabia.
The article said higher yields and a firmer dollar weighed on gold as well. The US 10-year Treasury yield rose nearly five basis points to 4.598%, a headwind for the yellow metal given their inverse relationship, and the US Dollar Index was up 0.19% to 100.94.
The report also cited Fed commentary and expectations for upcoming US data. It noted that money markets were pricing 82% odds of a rate hike by year-end and nearly a 79% chance of holding rates unchanged for the July meeting, with jobs data and S&P Global Flash PMIs due next week ahead of the July 29 policy decision.
Latest closeGold $3,981.40 ▼1.6%|Dollar index 100.71 ▲0.2%