2026-07-13T07:05:25+00:00
Shafaq News
Gold prices slid more than 1% on
Monday as fears of a closure of the Strait of Hormuz drove oil prices sharply
higher, reviving expectations of elevated interest rates to combat inflationary
pressures from escalating hostilities in the Middle East.
Spot gold dropped 1.5% to $4,060.36
per ounce by 0541 GMT. U.S. gold futures for August delivery were down 1.1% at
$4,068.30.
U.S. and Iranian forces have
exchanged heavy missile and drone assaults, with Tehran targeting U.S.
facilities in states across the Gulf on Sunday and saying it had again closed
the vital Strait of Hormuz.
Oil prices jumped about 4%, the
dollar and U.S. Treasury yields climbed, and share markets slipped in Asia.
“Any breakout of violence in
the Gulf is accompanied by pressure on gold,” said Nicholas Frappell,
global head of institutional markets at ABC Refinery.
“The question is, if the
Strait of Hormuz remains effectively or partially closed, does that lead to a
deflationary effect, further down the road, that might actually be supportive
for gold if you have demand destruction leading to lower economic
activity,” Frappell added.
Kevin Warsh’s first semiannual
testimony before Congress as Federal Reserve chair, along with a slate of key
U.S. economic data, including June CPI, PPI and retail sales, will be closely
watched this week for fresh clues on the economy, inflation and the monetary
policy outlook.
Remarks from Fed policymakers,
including Vice Chair Michelle Bowman and Governor Christopher Waller, later
in the day are also in focus as they could provide insights on how inflationary
pressures are affecting the central bank’s stance on interest rate hikes.
Traders are currently pricing in a
72% chance of a U.S. Fed interest rate hike in September, up from about 63%
last week, according to the CME FedWatch Tool. FEDWATCH/
COMEX gold speculators trimmed their
net long positions by 1,964 contracts to 114,854 in the week to July 7, data
released on Friday showed, following three consecutive weeks of increases.
Elsewhere, spot silver declined 2.6%
to $58.29 per ounce, platinum shed 1.6% to $1,601.92, and palladium fell 2% to
$1,251.42.
(REUTERS)
Only the headline is edited by
Shafaq News.
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