Gold dives to 4-month low as inflation pressures lift rate hike bets |
Gold dives to 4-month low as inflation pressures lift rate hike bets
Gold slid more than eight per cent on Monday to hit its lowest level in four months, after logging its biggest weekly loss in about 43 years last week, as an escalating Middle East conflict stoked inflation concerns and raised expectations of higher global interest rates.
Spot gold declined 6.3pc to $4,203.21 per ounce by 07:57 GMT (12:57pm PKT), extending losses into a ninth straight session. It had shed more than 8pc to $4,097.99 earlier in the session to its lowest level since November 24.
The metal dropped more than 10pc last week, its steepest weekly loss since February 1983, and has also retreated about 25pc from its record peak of $5,594.82 an ounce reached on January 29.
US gold futures for April delivery dropped 8.1pc to $4,205.10.
“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 have tarnished gold’s appeal from a yield point of view,” said Tim Waterer, chief market analyst, KCM Trade.
Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours in retaliation if US President Donald Trump followed through with his threat to hit Iran’s electricity grid.
Asian shares fell, and oil prices stayed above $110 a barrel.
“Gold’s high liquidity appears to be hurting it during this risk-off period. Downturns in........