Gold Snaps Three-Day Winning Streak as Oil Surge Reignites Inflation Fears
Bullion fell as much as 0.5% on Tuesday, pressured by a rally in oil prices and bond yields driven by escalating Middle East tensions. The moves clouded the Fed's rate outlook and revived speculation of further tightening.
Gold prices dropped on Tuesday, ending a three-session advance, as a fresh spike in crude oil renewed worries about inflation and its potential to shift the Federal Reserve's monetary policy stance. The precious metal fell as much as 0.5% during the session.
The decline came amid rising bond yields and a surge in oil prices, driven by ratcheting Middle East tensions. Hopes for a diplomatic resolution to reopen the Strait of Hormuz faded, adding to supply fears.
The combination of higher energy costs and the resultant inflation pressure clouded the outlook for interest rates, reviving speculation that the U.S. central bank may need to resume tightening rather than cutting rates.
Source: First Squawk