FX.co ★ Gold Extends Decline on Mideast Hostilities

Gold slipped toward $4,200 an ounce on Wednesday, hitting its lowest level since March 23 after the US carried out new strikes against Iran in response to the downing of an American helicopter. The escalation pushed oil prices higher and intensified inflation concerns. It also raised doubts about the durability of a fragile ceasefire and the chances of a broader peace agreement, while prolonging the near-total shutdown of the Strait of Hormuz. Rising energy costs tied to the conflict have amplified worries over persistent inflation and the prospect of additional central bank tightening, pressuring non-yielding assets such as gold. At the same time, investors turned their focus to upcoming US inflation data for fresh signals on the Federal Reserve’s policy trajectory. Stronger-than-expected US employment figures further reinforced expectations that the Fed could raise interest rates before the end of the year.