Gold futures dropped 2.2% to $4,066.50 an ounce after President Trump said he believed the Iran ceasefire was over, sending oil higher and reviving fears of faster inflation. Higher energy prices could keep U.S. rates elevated, and that outlook — not safe-haven demand — set the tone for bullion.
Gold sold off after President Trump said he believed a ceasefire deal with Iran was over, a remark that pushed oil prices higher and revived worries about inflationary pressure and interest-rate hikes. In midmorning European trade, New York gold futures fell 2.2% to $4,066.50 a troy ounce.
Gold is traditionally treated as a safe haven. Investors focused on the risk that higher energy prices from the conflict could reignite inflation and keep U.S. rates higher for longer — or push them up further — which weighed on the nonyielding metal. The prospect of another interest-rate hike undercuts an asset that pays no yield.
Trump's remarks followed a series of strikes between the U.S. and Iran, after Washington revoked a waiver allowing Tehran to sell oil — the sharpest escalation since the two sides signed an interim peace deal in mid-June. On Tuesday, the Islamic Revolutionary Guard Corps fired missiles and drones at ships near the Strait of Hormuz, denting confidence in the waterway's reopening and stoking fears of renewed supply disruptions.
The selling spread across London-listed miners. Gold and silver miners Fresnillo, Hochschild Mining and Endeavour Mining all fell more than 4% as bullion weakened. Diversified miners followed: Anglo American and the London shares of BHP and Rio Tinto dropped more than 3%, while copper miner Antofagasta fell around 4.5% and platinum miner Valterra Platinum was nearly 8% lower.
Central-bank buying has softened the fall. Analysts say continued purchases by China's central bank and broader efforts by global central banks to diversify reserves have provided underlying support for prices. Investors are now waiting on the Federal Reserve's meeting minutes, due later on Wednesday, for fresh cues on the policy outlook.
Source: marketscreener.com
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