The US-Iran conflict drives up oil prices and strengthens rate hike expectations, leading to a sharp pullback in gold prices.
Spot gold tumbled more than 2% on Tuesday, falling below $4,350 and hitting a two-week low, as well as breaking below the 100-day moving average. This was mainly due to U.S. Treasury yields rising to high levels and the strengthening U.S. dollar. The escalation of conflict between the U.S. and Iran pushed oil prices higher, intensifying inflation concerns and strengthening expectations of a rate hike. After gold prices broke below the 200-day moving average, technical selling pressure increased, and the commodity may remain in a weak sideways pattern in the short term.
According to China International Capital Corporation Wealth Futures, on September 1, the U.S. military began striking targets of Iran's Islamic Revolutionary Guard Corps, after which Iran quickly retaliated, escalating the conflict between the U.S. and Iran. The market quickly priced in the risk of intensified conflict, sending gold sharply lower. Regarding the outlook for gold, with the escalation of the U.S.-Iran conflict and the rebound in oil prices, it is still necessary to patiently wait for this pressure on gold price trends to subside.
Looking ahead, UBS believes that Federal Reserve Chair Walsh has recently taken a more hawkish stance, raising market expectations for a September rate hike, but the medium-term fundamentals for gold have not changed. UBS forecasts that by the end of September 2027, gold will rise to $5,400 per ounce.
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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