Gold tumbles over 2% as renewed US-Iran conflict boosts dollar, oil

Spot gold prices fell more than 2% to an 11-week low as a concurrent surge in the U.S. dollar and oil prices, fueled by the resumption of military conflict between the United States and Iran, stoked fears of inflation and interest rate hikes. The U.S. struck Iran on June 9 after President Donald Trump announced that Iran had shot down a U.S. Apache helicopter in the Strait of Hormuz. The incident has deepened market skepticism about a potential peace agreement and further strained an already fragile ceasefire. Ilya Spivak, head of global macro at research firm Tastylive, said the key drivers putting downward pressure on gold are changing expectations for Federal Reserve policy, rising Treasury yields, and a stronger dollar. He added that if gold prices fall below the $4,100 level, the support structure would fundamentally change, potentially targeting the next support level of $3,500 by the end of the year. Markets are now closely watching the release of key U.S. inflation data for clues on the Fed's monetary policy direction.