Spot Gold retreated more than 1% on Monday, weighed down by a firmer US Dollar and scaled back expectations of Federal Reserve interest rate cuts.
The US Dollar held near a more than three-month high of 99.695. A firmer dollar makes dollar-priced Gold less appealing to international investors holding other currencies.
The US Dollar is “outshining bullion as the preferred safe haven amid the flight to safety sparked by the U.S.-Israeli strike on Iran,” Tradu.com senior market analyst Nikos Tzabouras commented.
In addition, “reflationary risks could prevent Fed rate cuts and further dampen bullion’s appeal, leaving it vulnerable to deeper pullbacks and volatility.”
Oil prices soared past $100 per barrel for the first time since 2022, as supply disruptions intensified, sparking fears over renewed inflation globally. With oil tankers effectively blocked from the Strait of Hormuz, several Middle East oil producers had to curb output. The Strait of Hormuz is a crucial route for nearly one-fifth of global oil shipments.
Rising energy prices could complicate the Federal Reserve’s policy outlook, while adding to expectations that the central bank may delay rate cuts. Investor expectations for the next Fed rate cut have now been pushed back to September or October.
Spot Gold was last down 1.44% on the day to trade at $5,097.23 per troy ounce.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
