Gold slips 3% to four-month low

Gold prices slipped nearly 3 percent on Monday, hitting a four-month low as the Iran conflict showed little sign of abating.

Spot gold was down 2.8 percent at $4,364.4 per ounce as of 04:14 GMT, goldprice.org said. Gold trended lower for the ninth consecutive session.

“With the Iranian conflict into its fourth week, and oil prices hanging around the $100 level, expectations have pivoted from rate cuts to potential rate hikes, which has tarnished gold’s appeal from a yield point of view,” Reuters reported, quoting Tim Waterer, chief market analyst at KCM Trade.

Typically, higher interest rates are negative for gold prices because investors can earn bigger profits on interest-bearing instruments, whereas gold gains are purely down to price rises.

Prices have come off sharply from recent highs as energy markets push inflation expectations higher and delay the path to rate cuts. Gold, a non-yielding asset, is reacting to that shift in the short term, Nigel Green, CEO of deVere Group, said in a statement.

Iran has said it will strike the energy and water systems of Gulf countries if US President Donald Trump pursues his threat to hit Iran’s electricity grid in the coming days.

Silver shed 3.1 percent to $65.80 per ounce, according to goldprice.org.

Further reading:

• Gold falls despite Iran war as safe-haven status questioned
• Gulf insurers have ‘low exposure’ to war-related claims
• SWFs weigh private credit reward at a time of risk