Gold fell ​more than 2% ​on Thursday, retreating from a ​two-week high hit in the previous session, as the Middle East conflict drove energy prices higher, fuelling inflation concerns and reinforcing expectations of U.S. interest-rate hikes this year.

Spot gold ⁠dropped ‌2.1% to $4,044.83 per ounce, ⁠having hit its highest level since July 7 on Wednesday.

U.S. gold futures for August delivery slid 2.5% to $4,047.80.

The U.S. dollar gained 0.3%, making greenback-priced bullion expensive for buyers overseas, while yields on the ‌10-year U.S. Treasury note rose over 1% to a more than one-year high.

“The higher crude oil prices are pushing up bond yields on the ​notions that central banks will not be able to lower their interest rates because of problematic inflation, and rising bond yields are the enemy of gold and silver market bulls because gold and silver carry no ⁠yield,” said Jim Wyckoff, a market analyst at American Gold Exchange.

Brent crude oil prices hit $100 ‌a barrel for the first time since late May after ‌Yemen’s Houthis said they struck two Saudi oil tankers, raising fears that disruption to global oil supplies could spread beyond the Strait of Hormuz.

Elevated oil prices have been weighing on ⁠gold prices as they raised expectations of higher-for-longer interest rates, which tend to diminish ⁠the appeal of non-yielding gold.

Investors now await the U.S. Federal ⁠Reserve’s interest rate decision and Chair Kevin Warsh’s comments following the central bank’s two-day policy meeting next week.

Traders are pricing in about ​an 80% chance of a Fed ‌rate hike in September, up from 68% on Wednesday, according to the CME FedWatch Tool. “The marketplace expects no change in interest rates (next week), maybe a hawkish lean on the rhetoric. But if the Fed would happen to lean surprisingly dovish or surprisingly hawkish the markets would react,” ​Wyckoff said.