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Gold falls nearly 3% as traders weigh Fed outlook and US-Iran talks
Gold prices hit their lowest level since August 5, trading around $4,150, as oil volatility keeps inflation concerns in focus.
Gold prices dropped nearly 3% on Monday, with XAU/USD trading around $4,150, its lowest level since August 5, as traders sold the metal on expectations of further Federal Reserve interest rate hikes, according to FXStreet.
The outlet tied the pressure on gold to elevated and volatile oil prices, which keep inflation concerns elevated and reinforce the view that additional Fed rate increases are likely.
FXStreet also pointed to renewed focus on US-Iran developments, including US President Donald Trump rejecting Iran’s latest proposal to reopen the Strait of Hormuz within seven days, while expecting further talks with mediators holding separate US and Iranian discussions on Monday or Tuesday.
Despite gold’s traditional safe-haven and inflation-hedge role, FXStreet said it has gained little since the Middle East conflict began, and noted the metal is down about 25% from its January all time high near $5,600.
Latest closeGold $4,320.50 ▲0.5%