Spot gold fell 0.9% to $4,529.07 an ounce by 01:46 ET (05:46 GMT) on Tuesday, while gold futures were broadly steady at $4,560.92 per ounce. The move lower followed reports on Monday evening that the United States had carried out fresh military strikes against Iran.<\/p>\n
Other precious metals also weakened. Spot silver declined 2.1% to $76.4330 per ounce, and spot platinum slipped 0.7% to $1,951.33 per ounce. These moves came after several sessions of gains, during which markets had responded to reports that the U.S. and Iran were close to a framework deal to reopen the Strait of Hormuz.<\/p>\n
According to U.S. media reports, the latest military action targeted missile launch sites and mine-laying boats in southern Iran. U.S. Central Command presented the strikes as \u201cself defence\u201d and stated that the U.S.-Iran ceasefire remained in place. Iranian officials, however, warned that any new attacks on the country\u2019s military would be met with retaliation.<\/p>\n
The developments helped the dollar steady from recent losses and contributed to a rebound in oil prices after a week of declines. The recovery in oil prices renewed market concerns over the inflationary impact of the Iran war.<\/p>\n
Fears that energy-driven inflation will prompt more hawkish central bank policies have weighed on gold prices this year. Markets are now pricing in a 40% probability that the Federal Reserve will raise interest rates by 25 basis points by the end of the year, a scenario considered negative for gold because higher rates increase the opportunity cost of holding non-yielding assets.<\/p>\n
Beyond the Federal Reserve, other major central banks have also signaled potential rate hikes aimed at countering inflation linked to the Iran conflict. U.S. Secretary of State Marco Rubio said a U.S.-Iran deal would \u201ctake a few days\u201d and warned that the Strait of Hormuz would reopen \u201cone way or another,\u201d adding further uncertainty to the outlook for regional tensions and related market impacts.<\/p>\n
Why did gold prices fall on Tuesday?<\/strong> How did other precious metals perform?<\/strong> How are interest rate expectations affecting gold?<\/strong> What role does the Iran conflict play in inflation concerns?<\/strong>
Gold prices fell after news of fresh U.S. military strikes on Iran strengthened the dollar, lifted oil prices, and dampened optimism over a potential U.S.-Iran peace deal, all of which pressured bullion.<\/p>\n
Spot silver dropped 2.1% to $76.4330 per ounce, while spot platinum declined 0.7% to $1,951.33 per ounce, reversing part of their recent gains.<\/p>\n
Markets are pricing in a 40% chance that the Federal Reserve will raise interest rates by 25 basis points by year-end, and expectations of higher rates are weighing on gold because they raise the opportunity cost of holding non-yielding assets.<\/p>\n
The Iran war has contributed to higher oil prices, and markets are concerned that energy-driven inflation could prompt more hawkish policies from global central banks, which would be negative for gold prices.<\/p>\n