Shafaq News

Gold fell to an 11-week low onWednesday, as oil prices rose on renewed hostilities between the U.S. and Iran,fuelling concerns about inflation and interest rate hikes.

Spot gold was down 1.3% at $4,206.08 perounce by 0558 GMT, after hitting its lowest level since March 23. U.S. goldfutures for August delivery shed 1.4% to $4,228.

"We're seeing a kind of ⁠readjustment broadly in what globalcentral banks are going to do, and there's been a major hawkish shift,"said Ilya Spivak, head of global macro at Tastylive.

The United States on Tuesday launchedstrikes against Iran after President Donald Trump said Tehran had shot down aU.S. Apache helicopter in the Strait of Hormuz.

Iran's Revolutionary Guards said theyretaliated with attacks against a U.S. base in Jordan and 21 other targets inthe Gulf on Wednesday.

Oil prices jumped 1%, keeping upexpectations that interest rates would stay higher ⁠for longer.

While gold is seen as a hedge againstinflation, higher rates tend to weigh on the non-yielding metal.

Traders are now pricing in a more than70% chance of a U.S. rate hike by December, according to the CME FedWatch tool.

Markets are awaiting key ⁠U.S. inflation reports this week,including the May Consumer Price Index data later in the day and the ProducerPrice Index reading on Thursday, to gauge the Federal Reserve's monetary policy⁠stance.

"If we can break the $4,100 level,I think the path of resistance fundamentally changes for gold, and we might bestarting to look at $3,500 as ⁠the next level into the end of the year," Spivak said.

Spot silver fell 1.2% to $64.59 perounce, platinum dropped 3% to $1,675.50, and palladium fell 1% to $1,209.36.

(REUTERS)

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