(RTTNews) – Gold edged higher on Tuesday after falling nearly 3 percent to a two-week low in the previous session amid rising tensions in the Middle East and hawkish Fed bets.
Spot gold rose 0.4 percent to $4,018.05 an ounce, while US gold futures were up half a percent at $4,025.10.
The US dollar fell after gains in the previous session amid escalating tensions between the United States and Iran.
Crude oil futures hit a one-month high after the announcement of a fresh US blockade of Iranian ports near the Strait of Hormuz, pushing eurozone, US and UK 10-year bond yields to eight-week highs.
US President Donald Trump also declared the US the “custodian of the Strait of Hormuz” and proposed imposing a 20 per cent transit fee on cargo passing through the strategic waterway, posing a threat to the global supply chain.
In a post on Twitter, Iranian Foreign Minister Seyed Abbas Araghsi mocked Trump’s proposal and said Iran has always been the guardian of the strait and always will be. “20 percent is definitely too much. We will be fair,” Araghchi wrote.
Meanwhile, after the United States launched new attacks on Iran for the third consecutive night, Tehran launched strikes targeting Bahrain, Jordan and two tankers belonging to the United Arab Emirates.
An Indian crew member was killed and eight others were injured when Iranian missiles attacked two UAE tankers in the Strait of Hormuz.
After the attack on Sanaa, Houthis launched missiles and drones at Saudi Arabia’s Abha airport. Russia has sent one of its most secure airborne command planes to Tehran, according to flight tracking data.
On the economic front, traders are awaiting the release of US CPI and PPI inflation data as well as Federal Reserve Chairman Kevin Wersh’s testimony before Congress which could shape the outlook for interest rates.
Money markets are pricing in a nearly 50 percent chance of a Federal Reserve rate hike in July after Governor Christopher Waller expressed caution about inflation and said a warm core inflation reading this week could prompt the FOMC to consider policy tightening at its meeting in late July.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Reflect the views of.
