Gold drops nearly 3% as rising Middle East tensions fuel rate-hike prospects
GLD•Other precious metals
Among other metals, spot silver XAG= slipped 3.5% to $57.77 per ounce, platinum XPT= dipped 1.4% to $1,607.72, and palladium XPD= was down 1.7% to $1,254.94.
Key U.S. data due this week
The U.S. government is due to release key data this week, including the Consumer Price Index, Producer Price Index, and retail sales reports for June and weekly jobless claims.
Gold falls nearly 3% on inflation and rate concerns
Gold prices fell nearly 3% on Monday after U.S. President Donald Trump said he was reinstating a naval blockade on Iran, boosting oil markets, reigniting inflation concerns and raising prospects of higher-for-longer U.S. interest rates.
Spot gold XAU= was down 2.8% to $4,005.59 per ounce by 10:38 a.m. EDT (1438 GMT), the lowest level since July 1. Prices were down for the second straight session.
U.S. gold futures GCcv1 were down 2.4% to $4,013.40.
"Oil prices are rallying because of the Middle East conflict, and there is potential for policy tightening from the Federal Reserve. This is bad news for zero-yielding assets like gold," said Fawad Razaqzada, market analyst at Forex.com.
"If oil prices continue to push higher, gold prices could break down and potentially head towards the $3,800 level initially and possibly to $3,500 over time if the selling pressure accelerates," he added.
Higher oil prices lift inflation and rate-hike expectations
Trump said on Monday the U.S. was reinstating a naval blockade on Iran, and would be reimbursed 20% on all cargo shipped through the Strait of Hormuz after Tehran claimed it had closed the strait. Oil futures jumped 5% on the news. O/R
