Gold falls to two-week low on rate hike fears
Gold prices dropped to their lowest level in about two weeks after the Federal Reserve Chair indicated a possible interest rate hike to ease inflation pressures. This came amid rising tensions in the Middle East and growing concerns over inflation. The spot price of gold fell by 0.8% to $4,417.04 per ounce, while U.S. futures contracts declined by 1.4% to $4,466.80. Additionally, the U.S. military action in Iran led to higher oil prices and increased inflationary pressures. Although gold is traditionally considered a hedge against inflation, it has become less attractive as interest rates rise, with the market currently pricing in approximately a 60% chance of a rate hike in September.
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