Gold slides to two-week low as US-Iran flare-up lifts oil and rate-hike bets
Bullion dropped after its biggest daily loss in over a month, with surging crude prices and hawkish Fed remarks driving traders to price in a September rate rise.
Spot gold fell 0.2 per cent to $3,993.83 an ounce on Tuesday, touching its lowest in two weeks, after a near 3 per cent plunge the previous session — the largest single-day percentage decline in more than a month. The sell-off came as oil futures surged roughly 9 per cent to their highest since mid-June, propelled by a third consecutive night of US strikes on Iran and reports of tankers coming under fire in the Strait of Hormuz. The renewed conflict in the Gulf, a chokepoint for global energy flows, immediately fed into inflation expectations and reshaped the interest-rate outlook.
The mechanism is straightforward: higher oil prices stoke fears of persistent inflation, which in turn push up US Treasury yields and the dollar, eroding the appeal of non-yielding gold. The dollar index edged down 0.09 per cent to 101.18 ahead of the data, but the greenback had climbed alongside yields during the weekend flare-up. In currency markets, the yen remained near a 40-year low at 162.30 per dollar, with Tokyo officials signalling they may review the asset allocation of the government pension fund to encourage domestic investment — a move that briefly lifted the Japanese currency and bonds on Friday.
Viewed from Washington, the policy path is at a “crossroads,” in the words of Fed Governor Christopher Waller, who said on Monday that the central bank may need to raise rates “in the near term” if incoming data show inflation staying well above the 2 per cent target. Traders responded sharply: the probability of a September rate hike jumped to around 76–78 per cent, according to CME Group’s FedWatch Tool, up from 57 per cent a week ago. The repricing rippled across precious metals, with spot silver down 1.2 per cent to $56.98, platinum off 1 per cent to $1,589.35, and palladium easing 0.4 per cent to $1,242.54.
The next factual milestones are the US consumer price index for June, due later on Tuesday, followed by producer price data and the first semi-annual testimony of Fed Chair Kevin Warsh before Congress this week. Markets in London and New York will parse the inflation prints for any sign that the oil-driven price pressures are broadening, while Asian trading desks will watch for any further verbal intervention from Japanese authorities as the yen’s slide tests political tolerance levels.
| Arab Levant-Maghreb press | −0.40 | critical |
|---|---|---|
| Arab Gulf press | 0.00 | neutral |
| Iranian & allied press | 0.00 | neutral |
| Indian & South Asian press | −0.20 | neutral |
We, the region's media, denounce American aggression that destabilizes markets and harms our interests.
The bloc personifies the United States as an aggressor and builds a hierarchy of threats where geopolitical conflict is the primary cause of price movement, making the political narrative dominant.
The bloc omits the role of Fed rate hike expectations, present in other blocs, and downplays the impact of monetary policies.
We, the Gulf media, observe markets with detachment, reporting numbers and expectations without taking sides.
The bloc uses technical, depoliticized language that normalizes the event as part of normal market cycles, reducing the geopolitical drama to an economic variable.
The bloc omits the specific details of US military strikes and tanker attacks, present in the Indian/South Asian bloc, thus downplaying the severity of the conflict.
We, the Iranian media, report market facts accurately, without emphasizing the conflict but without hiding it.
The bloc adopts a balanced reporting style, citing sources like Reuters, which appears objective while acknowledging the tension, a strategy of apparent neutrality.
The bloc omits details of military strikes and tanker attacks, likely to avoid amplifying the conflict narrative.
We, the South Asian media, report with urgency the military attacks and their immediate impact on markets, highlighting the gravity of the situation.
The bloc uses vivid, specific details of military actions to create a sense of crisis and urgency, making the geopolitical event the central driver of market movements.
The bloc omits the context of Fed rate hike expectations and the fact that gold was already declining before the escalation, focusing solely on the conflict as the cause.
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