Gold prices retreated to a two-week low on Tuesday, pressured by a sharp rise in oil costs and growing market anxiety over inflation.
The precious metal’s decline reflects a broader shift in sentiment as investors weigh the economic impact of surging energy prices against the prospect of tighter monetary policy.
The sell-off in gold was driven by escalating tensions between the United States and Iran in the Gulf region, which sent oil prices soaring.
Higher energy costs raise the risk of persistent inflation, complicating the Federal Reserve’s mandate.
This dynamic has led traders to increase expectations for potential interest rate hikes, undermining the appeal of non-yielding assets like gold.
Federal Reserve Governor Christopher Waller reinforced this hawkish outlook with remarks that further weighed on precious metals.