Gold Stays Lower as Iran Standoff Fuels Rate Hike Expectations

Gold prices are holding losses as ongoing tensions regarding Iran's nuclear program contribute to sustained expectations for interest rate hikes by central banks. The market is reacting to the rate differential channel, where higher interest rates typically strengthen the U.S. dollar, making gold less attractive as a non-yielding asset. Precious metals, particularly gold, are most exposed due to their inverse relationship with interest rates and the dollar. Traders will be closely watching upcoming economic data releases, particularly U.S. inflation figures, which could further influence rate hike trajectories and gold's price movement.

Gold (XAU/USD) is a safe-haven asset and inflation hedge. Major drivers include Fed policy (real yields), central bank buying (PBOC, RBI), ETF flows, and geopolitical risk. Gold often moves inversely to DXY and real US yields.

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