Gold futures opened at $4,377.20 per troy ounce on Wednesday and slipped further to $4,357.50 as the U.S. and Iran exchanged fresh military strikes. The renewed escalation pushed gold to its lowest opening level in two weeks, while oil rose again on continued tension around the Strait of Hormuz.
Gold slipped to $4,357.50 per troy ounce as of 6:31 a.m. ET Wednesday. The decline extended a drop from the open, when December futures started the day at $4,377.20 per troy ounce, down 0.4% from Tuesday's closing price.
Iran conflict drives the sell-off
The U.S. military carried out further attacks on Iranian targets, and Iran quickly retaliated with strikes of its own on U.S. military bases in the Middle East. These were the second set of U.S. airstrikes over the past three days, marking a significant reescalation in the U.S.-Iran conflict.
As a result, gold opened at its lowest level in two weeks and fell further through the morning. Oil prices, meanwhile, turned higher again as the Strait of Hormuz remained the center of contention.
Fed rate outlook could cap gains
If fighting continues and energy costs soar again, the chances of a Fed interest rate increase later this month will only grow, capping gold's price growth.
Gold's longer-term trend
Despite the daily drop, gold's opening price on Wednesday still stood 6.7% above where it traded a month earlier and 25.6% above where it traded a year earlier, though it was down 5.2% from a week earlier. Gold's one-year gain reached 95.6% on Jan. 29.
As of 6:50:36 a.m. ET, the metal traded at $4,354.60, down $41.80, or 0.95%, with markets still open.
Source: Yahoo Personal Finance
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