fell on Tuesday as fresh U.S.
attacks in Iran pushed oil prices higher, fuelling concerns
around inflation and higher-for-longer interest rates.
Spot gold was down 1 per cent at $4,524.73 per ounce, as of
0737 GMT. U.S. gold futures for June delivery gained
0.1 per cent to $4,525.30.
U.S. Secretary of State Marco Rubio said negotiating a deal
with Iran could “take a few days,” quashing hopes for an
imminent end to the conflict a day after U.S. forces conducted
what Washington called defensive strikes in southern Iran.
“Even though we have a peace deal that is being done and
dusted between the U.S. and Iran, the damage that has been done
to Middle East oil production facilities could actually prevent
a rapid normalisation of oil flows to the rest of the world,”
said Kelvin Wong, a senior market analyst at OANDA.
“The market has started to price in this situation, showing
very high odds of an interest rate hike to come in this year.”
rose 2 per cent in Asian trade on Tuesday, as a
deal to end the war and open up the Strait of Hormuz remained
elusive.
Elevated crude oil prices can accelerate inflation and keep
interest rates higher for longer. While gold is seen as a hedge
against inflation, higher rates tend to weigh on the
non-yielding metal.
Markets are pricing in a U.S. Federal Reserve rate hike
before year-end, with a 56 per cent chance of a move by December,
according to CME Group’s FedWatch tool.
Spot silver fell 2.5 per cent to $76.12 per ounce, platinum
lost 1.1 per cent to $1,945.16, and palladium slid 1.7 per cent to
$1,374.35.