FX.co ★ Gold Holds Decline as US Strikes Iran

Gold hovered near $4,100 an ounce on Wednesday after sliding more than 1% in the previous session, as the US military launched new airstrikes on Iran following recent attacks on vessels transiting the Strait of Hormuz. The renewed escalation threatened the interim US-Iran peace agreement and pushed oil prices higher, fueling inflation concerns and increasing the likelihood of further interest rate hikes. At the same time, the US revoked a waiver that had allowed Iran to sell crude on international markets, while the latest hostilities discouraged shipowners and regional producers from using the Hormuz route, heightening the risk of fresh disruptions to global energy supplies. Investors also awaited the minutes of the Federal Reserve’s June meeting for additional insight into the policy outlook. Gold had recently rebounded after weaker-than-expected US employment data led markets to scale back expectations for imminent Fed rate increases, but the flare-up in Middle East tensions kept the outlook uncertain.