Gold nears $4,240 amid US rate worries
Gold prices rose close to $4,240 per ounce, driven by escalating tensions in the Strait of Hormuz following an Iranian attack on hostile targets. Reports indicate Iran's attempt to block passage of American and Israeli ships through this vital waterway. Despite this, the mounting tensions revive fears of higher U.S. interest rates, with the Federal Reserve expected to increase rates by about 60% in September if inflation data shows new upticks. Such an increase could reduce gold’s appeal as a safe haven. Gold has achieved weekly gains of approximately 5%, but its price has declined amid the escalation of tensions, with expectations that the rate hike policy will continue to put downward pressure on its future prices—especially as concerns over inflation persist and forecasts for gold’s future prices are lowered.
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