<\/p>\n
Gold extended a retreat as the widening conflict in the Middle East lifted energy prices and increased expectations the US Federal Reserve will tighten monetary policy to contain inflation.<\/p>\n
Bullion fell as much as 0.7% to around $4 020 an ounce after declining 2% the day before, erasing much of the gain from earlier in the week that was largely fueled by dip-buying.<\/p>\n
The war is in a new phase of escalation after the effective collapse of a truce signed last month. President Donald Trump has threatened to step up strikes on Iran and said he\u2019ll hold the country responsible for any further attacks by Yemen-based Houthis on Red Sea ships. Benchmark Brent crude oil rallied above $100 a barrel for the first time since May, while two-year Treasury yields rose for a sixth straight day on Thursday.<\/p>\n<\/p>\n
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Adding to the uncertainty, the US announced it will collect duties of between 10% and 12.5% on imports from most major trading partners, alleging forced labour in their supply chains. It is Trump\u2019s broadest move toward restoring his protectionist tariff regime since his earlier levies were struck down by the Supreme Court.<\/p>\n
Rising energy prices, alongside a seemingly resilient US labour market, increase the possibility that the Fed will raise interest rates. Higher borrowing costs are a headwind for the non-yielding precious metal.<\/p>\n
\u201cThe recent rally lacks fundamental support. If the bullish money runs dry, the rally will be like a castle in the air,\u201d China Zheshang Bank Co analysts wrote in a note. \u201cShould the Strait of Hormuz remain closed, oil prices stay high while the Fed maintains a hawkish stance, the gold price rebound will be unsustainable.\u201d<\/p>\n
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Swap traders currently see a 34% chance that the Fed will lift rates at a meeting next week. At least one hike is already priced in for September, and a second could come before the end of the year.<\/p>\n
Gold has largely hovered around $4 000 since late June, which some traders see as a key support level. It\u2019s down by roughly a quarter since the US and Israel launched strikes on Iran in late February, helping to end a multiyear bull run that had carried the metal to a record high near $5,600 the month before.<\/p>\n
Spot gold was down 0.5% at $4 030.90 an ounce as of 11:46 a.m. in Singapore. Silver was 0.4% lower at $57.34 an ounce, after falling 3.6% in the prior session. Platinum and palladium also declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, was little changed after rising 0.3% on Thursday.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Gold #extends #decline #higher #energy #costs #raise #ratehike #bets<\/p>\n","protected":false},"excerpt":{"rendered":"
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