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Gold falls below $4,450 as Middle East tensions fuel Fed-hike worries

Traders have increased to more than 65.4% odds of a September Fed hike, up from about 39.9% before Kevin Warsh’s Jackson Hole comments.

Reported · Written up by our desk · Precious Metals

Gold prices slipped to around $4,445 early Tuesday, dipping below the $4,450 level, as investors weighed how rising Middle East tensions could sustain inflation pressure.

FXStreet said the backdrop includes renewed risk after Iran and the United States traded fire for the first time in a month, with Iran’s Revolutionary Guard Corps stating it targeted US military bases, and the US announcing an attack on what it described as Iranian rocket launchers in the Strait of Hormuz.

The report linked gold’s loss of momentum to a hawkish shift in rate expectations, after Federal Reserve Chair Kevin Warsh reiterated the central bank’s commitment to its inflation target at the Jackson Hole symposium and said officials were not yet confident price pressures were easing. It noted that CME FedWatch pricing now points to more than 65.4% odds of a September rate hike, compared with about 39.9% prior to Warsh’s remarks, while surging oil prices added to inflation concerns.

Latest closeGold $4,509.30 ▲0.7%

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