Gold fell more than 1% on Wednesday as the dollar and oil prices rose on renewed hostilities between the United States and Iran.<\/p>\n
Bloomberg Creative | Bloomberg Creative Photos | Getty Images<\/p>\n
Gold\u00a0fell more than 1% on Wednesday to hit an 11-week low, as the dollar and oil prices rose on renewed hostilities between the United States and Iran, fuelling concerns about inflation and interest rate hikes.<\/p>\n
Spot\u00a0gold<\/a>\u00a0lost 1.8% to $4,187.59 per ounce by 0230 GMT, hitting its lowest level since March 23. U.S.\u00a0gold\u00a0futures<\/a>\u00a0for August delivery were down 1.7% at $4,213.40.<\/p>\n The dollar rose, making greenback-priced bullion more expensive for holders of other currencies. Oil prices rose 1%, stoking concerns around inflation and cementing expectation that interest rates would stay higher for longer.<\/p>\n “The driver really is the shift in Federal Reserve policy expectations, the rise in yields, and the rise in the dollar. I think all of those things are weighing on\u00a0gold,” said Ilya Spivak, head of global macro at Tastylive.<\/p>\n The United States on Tuesday launched\u00a0strikes\u00a0against Iran after President Donald Trump said Tehran had shot down a U.S. Apache helicopter in the Strait of Hormuz, deepening doubts over a potential peace deal and further straining a fragile truce.<\/p>\n Traders are now pricing in a more than 70% chance of a Federal Reserve interest rate hike by December, according to the CME FedWatch tool.<\/p>\n While\u00a0gold\u00a0is seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal.<\/p>\n Markets are awaiting key U.S. inflation reports this week, including the May Consumer Price Index data later in the day and the Producer Price Index reading on Thursday, to gauge the Fed’s monetary policy stance.<\/p>\n “If we can break the $4,100 level, I think the path of resistance fundamentally changes for\u00a0gold, and we might be starting to look at $3,500 as the next level into the end of the year,” Spivak said.<\/p>\n Spot silver<\/a>\u00a0fell 1.5% to $64.43 per ounce, platinum<\/a>\u00a0dropped 2.8% to $1,678.10, and palladium<\/a>\u00a0fell 0.8% to $1,212.31.<\/p>\n