Gold hits over 3-week low as Mideast tensions fan rate-hike fears
GLD•Investors await jobs data; other metals also fall
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.
Among other metals, spot silver XAG= lost 0.9% to $63.68 per ounce, platinum XPT= edged 0.9% lower to $1,725.03 and palladium XPD= fell 1.3% to $1,293.86.
Middle East tensions lift oil and inflation concerns
The U.S. and Iran found themselves back in a war footing after the most significant exchange in weeks. Oil prices rose for a third straight session, while U.S. Treasury yields climbed.
"A rebound in oil prices after renewed U.S.-Iran tensions added to inflation concerns. A 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 an hedge against inflation, but higher interest rates weigh on its appeal as it offers no yield.
Traders are currently pricing in a 68% 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. Last week, Fed Chairman Kevin Warsh signaled the Fed may need to hike rates.
Gold falls as conflict, yields and dollar weigh on prices
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.
