(RTTNews) – Gold prices tumbled on Tuesday as rising oil prices and bond yields stoked worries about inflation and interest-rate hikes.
Spot gold slumped 1.8 percent to $4,367.44 an ounce after climbing nearly 10 percent during August. U.S. gold futures were down 1.4 percent at $4,419.84.
The U.S. dollar index regained positive traction as a global bond rout deepened, driving sovereign borrowing costs across Europe.
Germany’s 30-year government bond yield hit a fresh 15-year high while France’s 30-year yield touched its highest level since 2008 as traders assessed Middle East tensions and awaited key U.S. labor market data this week for additional clues on the Federal Reserve’s rate trajectory.
Brent prices rose toward $92 a barrel on concerns about prolonged disruptions to energy flows through the Strait of Hormuz.
U.S. President Donald Trump has threatened to hit Iran “hard” after the two foes traded fire for the first time in over a month.
Heightened tensions emerged after the U.S. attacked two Iranian rocket launchers on Larak Island and Iran retaliated with attacks on the United Arab Emirates and Jordan.
The surge in oil prices fueled worries over inflation and raised the likelihood of tighter monetary policy, with traders now pricing a 57 percent chance of a September rate hike by the Federal Reserve.
Friday’s U.S. August payrolls report and consumer price data due on September 11 will be key to assess the prospects of a Fed rate hike this month.
Elsewhere, the European Central Bank (ECB) is likely to raise its key interest rates by 25 basis points at its policy meeting on September 9-10.
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