Gold fell on Monday as rising oil prices and growing expectations of US interest rate increases combined to push the metal lower.
Spot gold dropped 0.5% to $4,067.99 per ounce by 00:45 GMT. August gold futures on US markets fell 0.4% to $4,081.20.
The pressure on gold came from two directions. Oil prices climbed after fresh exchanges of strikes between the US and Iran in the Middle East slowed energy shipments through the Strait of Hormuz again, drawing risk appetite toward energy markets. At the same time, CME Group’s FedWatch tool showed traders pricing in three Federal Reserve rate increases this year, with roughly 77% odds on a hike in December. Higher rates tend to weigh on gold, which offers no yield.
The broader context involves a fragile ceasefire. Iran launched missiles and drones at US military sites in Kuwait and Bahrain early Sunday, shortly after President Donald Trump threatened to eliminate Iranian leadership if Tehran did not comply with a deal to end the war. Axios reported on Sunday that the two sides had since agreed to halt the latest round of hostilities in the Gulf and resume talks over the Hormuz dispute.
Other precious metals also moved. Spot silver fell 1.1% to $58.49 per ounce. Platinum rose 0.4% to $1,620.15, while palladium slipped 0.4% to $1,204.25.
