Gold prices declined amid the escalation between the US and Iran in the Persian Gulf, which threatened the truce and increased inflationary risks. This was reported by Reuters, according to UNN.
Details
The price of gold dropped to approximately $4,520 per ounce after a 2% fall on Monday.
The decline occurred against the backdrop of combat incidents in the region, including an exchange of strikes between the US and Iran.
Reasons for the fall
The US military stated that they repelled Iranian attacks and secured the passage of two vessels through the Strait of Hormuz. Meanwhile, the UAE reported intercepting Iranian missiles and a fire at the Port of Fujairah following a drone strike.
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These events undermined the four-week ceasefire that had been in effect since April 8.
Against this background, oil prices rose sharply, and the yield on 30-year US Treasury bonds reached its highest level since July.
Impact on gold
Rising yields and a strengthening dollar negatively affect gold as a non-interest-bearing asset.
Tensions in the Middle East are escalating, oil prices are rising, and gold is taking a hit due to the rise of the dollar and yields
According to him, in the event of further escalation, gold prices could continue to decline.
Other indicators
Silver fell by 0.2% to $72.64 per ounce, while platinum and palladium also showed slight declines. The dollar index remained stable after a previous increase.
Investors are awaiting new signals from the US Treasury Department and macroeconomic data regarding the future policy of the Federal Reserve.
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