(RTTNews) – Gold prices fell sharply on Thursday after the US launched fresh self-defense strikes in southern Iran and Tehran also targeted a US airport with strikes, lifting global oil prices and rekindling inflation worries.
Spot gold fell 1.4 percent to $4,395.53 an ounce, while US gold futures for August delivery were down 1.3 percent at $4,424.75.
Treasury yields rose, the dollar hit a one-week high and Brent crude prices rose nearly 2 percent after US forces shot down four Iranian drones and attacked a control center in the southern port city of Bandar Abbas to stop a fifth drone launch.
Iran’s Islamic Revolutionary Guard (IRGC) said it targeted a US airbase in Kuwait in response to the latest US airstrike.
Earlier, US President Donald Trump indicated there were still major hurdles in talks with Iran and warned Oman against attempting to influence control over the Strait of Hormuz.
Hours later, the US Treasury approved the Persian Gulf Strait Authority set up to control the Strait of Hormuz, dealing a new blow to the prospects for a negotiated settlement.
Meanwhile, when Iranian state TV published a preliminary, informal framework draft for a memorandum of understanding between the US and Iran, White House adamantly denied its accuracy.
After months of intelligence tracking, Hama’s armed wing confirmed that its military chief, Mohammed Odeh, had been killed in an Israeli strike in Gaza.
In economic releases, investors await the release of the Fed’s favorite inflation gauge, the main PCE price index, later in the day for new clues on the monetary policy path under new Chairman Kevin Warsh.
Amid higher energy prices, analysts expect the PCE price index to rise an annualized 3.8 percent in April, up from 3.5 percent in March and well above the 2 percent long-term rate targeted by the U.S. central bank.
Fed Vice Chairman Philip Jefferson said on Wednesday that inflation risks are tilted to the upside and the current setting of monetary policy is in the right place.
Separately, Fed Governor Lisa Cook said she would be willing to raise interest rates in response to rapidly rising prices.
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