Geopolitical Tensions and Rate Hike Fears Drive Down Gold

Deep News07-13 07:20

Renewed hostilities between the US and Iran over the weekend, involving reciprocal strikes, have pushed energy prices higher, leading markets to increase bets that central banks will raise interest rates to combat inflation. This has triggered a decline in the price of gold.

On Monday, gold saw its largest drop of 1.2%, falling below $4,070 per ounce. This follows a cumulative decline of 1.4% for the precious metal last week. The situation regarding navigation through the Strait of Hormuz remains unclear: Iran had previously stated the crucial waterway would be "closed indefinitely," a claim denied by the United States. The US Central Command stated that American military strikes were conducted to ensure freedom of navigation.

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