(RTTNews) – Gold prices fell on Monday due to inflation and rate-hike fears. Spot gold was trading 4.7 percent lower at $4,279.27 an ounce, having earlier fallen to a low of $4,099.55. US gold futures were down 6.4 percent at $4,315.54.
As the Iran war has sent global energy prices soaring, there are fears that cost-driven inflation could prompt major global central banks to maintain a dovish stance in the coming months.
Several major central banks signaled last week that they were prepared to raise interest rates to tackle inflation.
Federal Reserve Chairman Jerome Powell’s tone and March 18 guidance suggested a rate hike was unlikely, but not yet likely.
The dollar rose and Treasury yields near an eight-month high as investors worry about the impact of the Middle East conflict on inflation and increased energy costs on global economic growth.
Risk-off sentiment prevailed in financial markets after Washington and Tehran threatened to escalate hostilities.
US President Donald Trump has threatened military action against Iranian power plants if the Strait of Hormuz is not reopened within 48 hours.
Iran warned that if Trump followed through on his threat it would retaliate by attacking energy and water infrastructure across the Gulf.
Speaker of the Iranian Parliament Mohammad Bagher Ghalibaf warned that any attack on Iran’s power plants would cause irreparable damage to regional energy and desalination infrastructure.
Ghalibaf also said that the entities that finance the US military budget are “legitimate targets” for the country, along with military bases.
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