Gold slips as US-Iran tensions lift oil, US rate-hike bets weigh

Synopsis

Gold prices dipped as escalating U.S.-Iran tensions fueled oil prices, while anticipated U.S. Federal Reserve interest rate hikes added further pressure. Despite a brief missile exchange, both nations reportedly agreed to de-escalate and resume talks. Meanwhile, Indian gold demand saw a premium emerge, contrasting with subdued activity in China. Other precious metals experienced mixed movements.

Gold prices slipped on Monday as renewed U.S.-Iran hostilities pushed oil prices higher, while expectations of U.S. Federal Reserve interest rate hikes further weighed on the metal.

FUNDAMENTALS

Spot gold was down 0.5% at $4,067.99 per ounce, as of 0045 GMT. U.S. gold futures for August delivery lost 0.4% to $4,081.20.

Iran ‌launched missiles ⁠and drones ⁠at U.S. military sites in Kuwait and Bahrain early on Sunday, shortly after U.S. President Donald Trump threatened to wipe out the Iranian leadership if they did not stick to the agreement to end their war.

However, Tehran and Washington agreed to halt recent hostilities in the Gulf and renew talks regarding their dispute over the Strait ⁠of Hormuz, ‌Axios reported on Sunday.

Oil prices rose on Monday following days of tit-for-tat strikes by the United ⁠States and Iran in the Middle East that underscored the fragility of their interim peace deal and again slowed energy shipping in the Strait of Hormuz.

Data on Thursday showed that U.S. inflation accelerated in May, breaking above 4.0% for the first time in three years as the Middle East conflict boosted energy prices.

Traders expect three Fed rate ‌hikes this year and are pricing in an about 77% chance of a December increase, according to the CME FedWatch Tool.

Gold started trading ⁠at a premium in India last week for the first time in a month and a half, as a price correction lifted buying, while demand stayed subdued in top consumer China.

Gold speculators raised net long positions by 91 contracts to 113,010 in the week ended June 23.

Spot silver fell 1.1% to $58.49 per ounce, platinum gained 0.4% to $1,620.15, while palladium lost 0.4% at $1,204.25.

DATA/EVENTS

(GMT) 0900 EU Consumer Confid.Final June

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