Gold hits over 3-week low as Mideast tensions fan rate-hike fears
GLD•Other precious metals also decline
Among other metals, spot silver XAG= lost 0.5% to $63.96 per ounce, platinum XPT= edged 0.2% lower to $1,736.51 and palladium XPD= fell 0.4% to $1,305.25.
Fed comments and jobs data keep traders focused on rates
"A rebound in oil prices after renewed U.S.-Iran tensions added to inflation concerns. Pricier crude could continue to tighten monetary policy expectations and drive yields higher, limiting any rebound potential for gold," said Bas Kooijman, CEO and asset manager of DHF Capital S.A.
Gold is seen as a hedge against inflation, but higher interest rates weigh on its appeal as it offers no yield.
Traders are pricing in a 70% chance of a rate hike at the Federal Reserve's policy meeting this month, according to the CME FedWatch Tool.
Fed Governor Michael Barr said if inflation does not cool quickly, it will be time for the central bank to raise rates. Fed Chair Kevin Warsh signaled in his Jackson Hole speech last week that the Fed may need to hike.
Investors are now awaiting the ADP employment report, due later in the day, and the more crucial nonfarm payrolls data on Friday.
"Softer figures could ease the pressure on gold, while stronger data or more hawkish Fed comments may extend the decline," Kooijman said.
Gold falls as Middle East conflict lifts inflation and rate-hike fears
Gold fell to its lowest in more than three weeks on Wednesday as the escalating Middle East conflict lifted oil prices, stoking inflation and rate-hike fears, while investors focused on upcoming U.S. jobs data.
