Gold Prices Decline Further Amid Escalation of Israel-Iran Tensions
Middle East Conflict Weighs on Gold Prices
The price of gold extended its decline on Tuesday after Israel said it struck Iranian targets in response to missile attacks by Tehran, threatening a fragile ceasefire in the Middle East. The precious metal fell as much as 0.7% to near $4,300 an ounce, having given up nearly 5% last week during the worst flare-up in regional hostilities since a ceasefire was agreed in early April.
The fighting escalated on Monday, with the Israel Defense Forces saying it hit military targets in western and central Iran after intercepting missiles fired by Tehran. The latest strikes came despite President Donald Trump's call for Israel to refrain from escalation as the US leader pursued a negotiated solution to the conflict.
A military adviser to Iran's supreme leader said the country's missile launch toward Israel on Sunday was a "warning" to cease attacks in Lebanon, a side-conflict that has been a sticking point in negotiations for a wider agreement between Washington and Tehran. The ongoing conflict has disrupted energy flows via the Strait of Hormuz, driven oil prices higher and raised concerns about global inflation, making central banks more likely to keep interest rates steady or raise them.
