(RTTNews) – Gold prices plummeted below $4,200 an ounce on Wednesday as investors weighed rising U.S.-Iran tensions and awaited key U.S. inflation reading for fresh insights into market expectations for future interest rates in the face of rising energy-driven inflation risks.
Spot gold tumbled nearly 2 percent to $4,173.99 an ounce due to shifting interest rate expectations globally. U.S. gold futures were down 2.2 percent at $4,192.09.
Hopes for a U.S.-Iran peace deal and the reopening of Strait of Hormuz faded after the U.S. military launched fresh strikes against Iran in a very strong, powerful response to the downing of a U.S. Army Apache helicopter off the Oman coast.
It was said that U.S. fighter jets struck Iranian air defense systems and radar sites near the Strait of Hormuz.
Iran also launched missiles and drones toward U.S. targets in the region and warned that “heavier and broader” attacks would follow if the United States continued aggression against Iran.
Iranian Foreign Minister Abbas Araghchi said that no attack or threat from the United States will be left unanswered.
“Despite its defeats on the battlefield, the U.S. opted to test our determination,” Araghchi wrote on X and also asked foreign forces to leave the region.
The dollar was steady ahead of the release of key U.S. CPI reading. Analysts estimate that the U.S. inflation rate may have climbed to 4.2 percent in May, which could be its highest level in three years in the face of increased living costs.
The European Central Bank meets on Thursday, with economists expecting the central bank to hike interest rates amid spiking energy prices.
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