Ammon News - Gold prices fell on Thursday, hovering near a ‌one-week low, as renewed U.S.-Iran hostilities lifted crude and reignited concerns about inflation and higher-for-longer interest rates.

The U.S. military said on Wednesday it launched fresh strikes on Iran to keep the Strait ​of Hormuz open to shipping, triggering Iranian attacks on Kuwait and Bahrain ​in the latest escalation to derail efforts to end the war.

Spot ⁠gold fell 0.2% to $4,068.77 per ounce by 0522 GMT, after dropping to its ​lowest since July 1 on Wednesday. U.S. gold futures for August delivery were ​down 0.1% at $4,077.60.

"The catalyst that is supporting this trend to the downside for gold is a repricing of a second interest rate hike by the Federal Reserve to come in as ​early as Q1 next year," said Kelvin Wong, a senior market analyst at ​OANDA.

"After yesterday's skirmish, that temporary ceasefire agreement between U.S. and Iran is on shaky ground right ‌now, ⁠so things could turn pretty fluid again."

Markets are pricing a 68% chance of an interest rate hike in September, and see an 87% chance of an increase in January 2027, the CME FedWatch tool showed. FEDWATCH/

Concern about high inflation also mounted ​at the U.S. central ​bank's meeting last month, ⁠as officials followed Fed Chairman Kevin Warsh's lead to a more stripped-down policy statement even amid concerns that price increases ​were broadening and might require interest rate hikes.

While gold is ​seen as ⁠an inflation hedge, high interest rates tend to weigh on the non-yielding asset.

Bank of America said it is reducing its 2026 average gold forecast by 14% to $4,360 an ⁠ounce, ​citing a more hawkish Fed.

Elsewhere, spot silver fell ​0.5% to $57.98 per ounce, while platinum rose 1.1% to $1,595.51 and palladium gained 0.9% to $1,224.12.

Reuters