Gold Falls Below US$4,000, US-Iran Conflict Pressures
Gold prices fell again below US$4,000 per troy ounce on Monday (July 20th). This decline brought gold closer to a nine-month low, as the escalating tensions between the United States and Iran escalated.
Pressure on gold came from the launch of oil prices, which fueled inflation concerns. The market believes rising energy prices could force central banks, including the Fed, to maintain tighter policies or raise interest rates again.
The United States military announced it had launched new airstrikes against Iran on Sunday, after three of its military personnel were killed. Meanwhile, Tehran declared the ceasefire with the US had effectively collapsed.
Iran also claimed to have intercepted four ships passing through the Strait of Hormuz over the weekend. This situation has increased market concerns about disruptions to the world's vital energy routes and pushed oil prices higher.
Oil prices have now surged 30% from their July lows. At the same time, Cleveland Fed President Beth Hammack also warned of persistent inflation risks. The market now predicts a 53% chance of a Fed rate hike in September, up from 47% the day before.
In terms of market impact, gold remains under pressure due to high oil prices, renewed inflation concerns, and rising expectations of interest rate hikes. If the US dollar and Treasury yields also strengthen, XAU/USD could potentially struggle to stabilize above US$4,000. However, geopolitical factors could still prevent gold from weakening further, as some investors are still seeking safe haven assets. (asd)*
Source: Newsmaker.id
