Commodities● Neutral
Gold Drops Below $4,070 After US-Iran Strikes Fuel Rate-Hike Bets
Gold dropped 1.2% to $4,077 after US-Iran strikes raised rate-hike odds. Fed's Warsh testifies Tuesday; CPI data due.
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Gold slid below $4,070 an ounce Monday after the US and Iran exchanged strikes over the weekend, sending energy prices higher and reviving bets on Federal Reserve rate hikes.
Bullion fell as much as 1.2% to $4,067.50, extending a 1.4% loss from last week, according to Bloomberg data. Confusion surrounded the status of energy transit through the Strait of Hormuz. The US denied an earlier statement by Iran that the waterway would be closed "until further notice." American forces conducted attacks to ensure freedom of navigation, US Central Command said.
Higher energy prices complicate the Fed's inflation fight, traders said. Minutes of the Fed's June meeting released last week showed a few policymakers saw a case for raising rates, though the committee voted to keep them steady. The minutes showed growing concern about inflation. Worries about the labor market, by contrast, receded slightly.