(RTTNews) – Offsetting the gains from yesterday’s session, gold prices have tumbled on Thursday as investors weighed the ongoing intense U.S.-Iran re-escalation and its consequent increase in oil prices as well as the potential chances for a rate hike in the U.S.
Front Month Comex Gold for October delivery has slumped by $53.50 (or 1.21%) to $4,373.20 per troy ounce.
Front Month Comex Silver for October delivery has also tumbled by $3.712 (or 5.45%) to $64.390 per troy ounce.
Yesterday, while heading to Texas for the first mid-term election convention, U.S. President Donald Trump stated that the U.S.-Iran war will end soon after the mid-term U.S. elections in November.
Adding that Iran would not be able to hold any longer than that, Trump asserted that right after the election, crude oil prices would tumble.
Trump criticized Iran of being desperate to try and impact the upcoming U.S. elections as it wants a party that supports its nuclear weapons program in power.
Though Trump conceded that talks with Iran could happen, he remarked that the U.S. was not keen on it.
Contradicting Trump’s assurances and raising concerns of a protracted, deep war in the Middle East, the Wall Street Journal reported that senior advisers to Trump have informed him about the prospects of the war getting dragged until the remainder of Trump’s term.
With the Strait of Hormuz shut since the war began and more oil facilities coming under attack after U.S. and Iran began trading fierce attacks in the past two weeks, oil-linked inflationary concerns have triggered expectations of higher interest rates in the U.S.
Late on Tuesday, U.S. forces attacked and destroyed five oil tankers linked to Iran’s Islamic Revolutionary Guards Corps in the Gulf of Oman and the northern Gulf.
Early Wednesday, the IRGC claimed to have targeted two U.S. Navy destroyers (which U.S. Central Command denied) and eight oil tankers in the Strait of Hormuz. IRGC also launched ballistic missiles at an air base in Jordan.
Aside from this conflict, the Iran-supported Houthi militant group in Yemen conducted a series of missile and drone attacks on south-western Saudi Arabia, causing extensive damage at several oil facilities.
To prevent the Houthis from gaining control over the Bab al-Mandeb Strait, the Yemeni government-aligned forces have launched counter-attacks.
WTI crude oil for October delivery was last seen trading at $101.79, up by $5.74 (or 5.98%).
Today, the data released by the U.S. Bureau of Labor Statistics revealed that on a month-on-month basis, the Producer Prices increased 0.40% in August.
On a year-on-year basis in August, the PPI rose 5.40%, accelerating from a 4.80% increase in July.
Data from U.S. Department of Labor revealed that on a month-on-month basis, the core producer prices (which excludes food and energy goods), increased 0.20% from the previous month in August.
For the same month, on a year-on-year basis, the core PPI inched up to 4.60% from an upwardly revised 4.30% in July.
In addition, the U.S. Labor Department’s data showed that for the first week of September, the number of people claiming unemployment benefits moved lower by 1,000 from the previous month to 206,000, which was in line with market expectations.
Continuing jobless claims decreased to 1,774,000 for the week ending August 29 from 1,775,000 of the previous week.
The U.S. dollar index was last seen trading at 99.00, up by 0.23 (or 0.23%) today.
According to the CME Group’s FedWatch Tool, currently investors are betting on a 71.80% chance of a 25-basis-point rate-hike at the upcoming meeting of the U.S. Federal Reserve on September 15-16 while the odds on rates being held at the current level stand at 28.20%.
The Consumer Price Index to be released tomorrow is the only major input awaited by analysts before next week’s monetary policy meeting of the U.S. Fed.
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