Gold eased back toward $4,000 an ounce on Wednesday, surrendering part of the previous session’s gains as escalating tensions in the Middle East kept inflation and interest-rate risks firmly in focus for investors. The United States launched another round of strikes against Iran and reinstated its naval blockade of Iranian ports near the Strait of Hormuz, heightening fears of further disruptions to global energy supplies.
On Tuesday, gold had jumped more than 1% after softer-than-expected US inflation data led traders to scale back expectations for imminent Federal Reserve rate increases. Testifying before Congress, Fed Chair Kevin Warsh reaffirmed the central bank’s commitment to restoring price stability but stopped short of adopting a more hawkish tone on future policy. Even so, futures markets continue to assign roughly a 50% probability to a Fed rate hike in September.
