<\/p>\n
Gold fell for a fourth day as escalating attacks in the Middle East and concerns about inflation pushed bond yields higher and fuelled further bets on interest rate hikes.<\/p>\n
Bullion dropped as much as 1.1% to trade below $4 300 an ounce, after falling 6% over the previous three sessions. Global bond yields climbed and stocks came under pressure after the US launched its second round of attacks against the Islamic Republic in three days, prompting retaliation by Tehran.<\/p>\n
The hostilities have fuelled a rise in oil prices this week, intensifying concerns about inflation after Federal Reserve Chair Kevin Warsh last week Friday doubled down on his vow to combat rising prices.<\/p>\n
The converging pressures had traders ramping up bets the Fed will hike interest rates at its September 15-16 meeting to a likelihood of about 70%, while pricing in at least two hikes by March next year. Higher rates tend to weigh on bullion, making the non-yielding asset less attractive by comparison.<\/p>\n
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The market reaction was \u201creasonable,\u201d with gold\u2019s drop reflecting the increased probability of rate hikes and a stronger dollar, said Frederik Fischer, senior portfolio manager for multi-asset and commodity funds at Allianz Global Investors. It also \u201cleaves some potential for positive surprises,\u201d he added.<\/p>\n
The fresh wave of strikes follows weeks of relative calm, and any sustained return to conflict risks driving up energy costs further.<\/p>\n
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Yields on the longest-dated US government bonds shot back to levels seen just before Treasury Secretary Scott Bessent shocked markets last month by expanding a buyback program in an effort to halt the rise.<\/p>\n
Fed Governor Michael Barr on Tuesday said the central bank should be prepared to raise interest rates if inflation fails to subside, warning price pressures are at risk of becoming entrenched after being above target for more than five years. His comments follow signs of division at the central bank\u2019s last policy meeting in July, where three regional Fed bank presidents dissented in favor of a rate increase.<\/p>\n
Spot gold was down 0.5% at $4 309.25 an ounce at 10:40 a.m. in London. Silver was 0.6% lower at $63.69 an ounce. Platinum and palladium also declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, was 0.1% higher.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Gold #extends #decline #inflation #risks #pull #yields #higher<\/p>\n","protected":false},"excerpt":{"rendered":"
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