Gold Prices Slump As Middle East Tensions Lift Dollar

Spot gold fell more than 1 percent to $5,266.79 an ounce while U.S. gold futures were down 0.6 percent at $5,279.46.

The dollar continued to rally and bond yields ticked higher as inflation and interest-rate concerns dented investors’ appetite for riskier assets.

As the latest Middle East conflict entered its fourth day, U.S. President Donald Trump suggested the war may last four to five weeks but could “go far longer than that.”

U.S. Secretary of Defense Pete Hegseth also offered few details about the operation or the scope of duration of the war but claimed it will not be ‘endless’, framing the conflict as a “generational” chance to reshape the Middle East.

Secretary of State Marco Rubio said “the hardest hits are yet to come from the U.S. military” and that the next phase will be even more punishing on Iran than it is right now.

Iran’s Revolutionary Guard said it has closed the Strait of Hormuz — a crucial waterway for the movement of oil, sending global oil, gas and shipping costs soaring.

Analysts said stubbornly high oil and gas prices may disrupt Federal Reserve plans to cut interest rates later this year.

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