(RTTNews) – Gold prices fell on Wednesday as oil prices continued to rise as renewed tensions in the Middle East clouded the outlook for inflation and interest rates.
Spot gold fell 0.9 percent to $4,448.70 an ounce, while US gold futures for August delivery were down 1 percent at $4,476.40.
Inflation concerns resurfaced as Brent crude prices jumped nearly 3 percent to $99 a barrel after reports that US forces had foiled Iranian missile attacks targeting Bahrain, Kuwait and other locations in the region.
There is considerable uncertainty over US-Iran talks aimed at ending the war and reopening the Strait of Hormuz, a vital waterway to energy markets globally.
US Secretary of State Marco Rubio said Iran has mined “large parts” of the Strait of Hormuz and that peace talks could take months to conclude.
Rubio also told the Senate Foreign Relations Committee that Iran’s Supreme Leader Mojtaba Khamenei is alive and increasingly active at some level.
Mixed signals from peace talks continued geopolitical uncertainty. Iranian media had reported that talks with America have been stopped amid the ongoing fighting in Lebanon.
It was being said that Tehran was adopting a ‘tough’ stance in the talks and had not been in contact with Washington for several days.
A senior Iranian military official said that the resumption of hostilities with the United States was inevitable.
However, US President Donald Trump said reports of stalled talks were “fake news” and that the two sides are “continuously” negotiating.
It was reported that the US military on Tuesday defeated several ballistic missiles and drones, and carried out self-defense strikes on Qeshm Island in response to attacks by Iran across the Middle East.
The OECD has sharply cut its global growth outlook and warned that a prolonged US-Iran conflict could push global growth close to recession levels.
Among economic releases, the ADP employment report for May, final durable goods and factory orders data for April, and the Fed’s Beige Book survey results will be in the headlines later today ahead of the all-important May employment report due on Friday.
Economists forecast an increase of 85,000 jobs last month, while the unemployment rate is seen holding steady at 4.3 percent.
On Tuesday, Cleveland Fed President Beth Hammack said interest rate hikes may be needed due to persistent inflation.
In a speech prepared for the University of Derby Business School on Tuesday, Bank of England policymaker Megan Green said action may be needed first to prevent the risk of economy-wide price rises.
Markets now look for an ECB rate hike next week after Eurozone inflation rose to the highest level since 2023 in May, driven by energy and services.
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