(RTTNews) – Gold prices were sharply lower on Wednesday as the dollar strengthened and global bond yields surged on renewed Middle East tensions.
Spot gold tumbled 1.3 percent to $4,052.96 an ounce while U.S. gold futures were down 2.3 percent at $4,062.79.
The U.S. dollar held around its highest level in a week, Japanese government bond yields surged to multi-decade highs, and Euro zone bond yields reached their highest levels in nearly a month as renewed Middle East tensions drove up crude oil prices, threatening inflation outlook and giving rise to Fed rate hike expectations.
Brent crude futures soared more than 6 percent toward $79 a barrel after the U.S. launched fresh air strikes in Iran and revoked a waiver that had allowed the country to sell oil globally.
Washington said it targeted more than 80 Iranian military targets following attacks on three commercial vessels in the Strait of Hormuz.
Iran’s Revolutionary Guards said they targeted U.S. military strikes in Bahrain and Kuwait. The latest escalation in geopolitical tensions added another layer of uncertainty in financial markets and put the interim U.S.-Iran peace agreement at risk.
On the economic front, investors await the release of the minutes of the first Federal Reserve meeting chaired by Kevi Warsh for fresh insights into the Fed’s rate trajectory.
Supported by softer jobs data, traders have reduced their expectations for imminent Fed rate hikes and expect only one increase this year.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com