Gold prices edged lower on Monday as renewed U.S.–Iran tensions pushed oil prices and U.S. Treasury yields higher, while expectations for another Federal Reserve rate hike increased.

At the time of writing, spot gold was trading around $4,446.50 per ounce, down 0.18%, while spot silver rose 0.16% to $66.36 per ounce.

Higher Oil Prices and Treasury Yields Pressure Gold

Markets continued to reprice the Federal Reserve outlook following Fed Chair Kevin Warsh’s hawkish speech at Jackson Hole.

The probability of a Fed rate hike in September rose to around 66.1%, up from 57% on Friday.

U.S. Treasury yields remained elevated:

• 2-year: around 4.34%

• 10-year: around 4.75%

• 30-year: near 5.25%

For gold, higher yields increase the opportunity cost of holding a non-yielding asset, limiting its ability to recover in the near term.

U.S.–Iran Tensions Push Brent Back Above $90

Geopolitical risk around the Strait of Hormuz remains a key market driver.

U.S. forces struck Iranian rocket launchers near the strait, while Iran responded with missile attacks on U.S. facilities in Jordan.

The escalation forced markets to reassess supply risks through the Strait of Hormuz, a route that handles roughly 20% of global oil trade.

Brent crude moved back above $90 per barrel, while WTI traded in the mid-$80s.

For gold, the impact is mixed: geopolitical tensions support safe-haven demand, but higher oil prices also increase inflation risks and strengthen expectations for tighter Fed policy.

U.S. and European Stocks Move Lower

Risk-off sentiment also spread across equity markets:

• S&P 500: -0.3%

• Dow Jones: -0.7%

• Nasdaq: -0.1%

• Russell 2000: -0.5%

In Europe, the STOXX Europe 600 fell 0.62%, while Germany’s DAX lost 1.17%.

Key Technical Levels for Gold

Gold remains under short-term pressure following Friday’s sharp decline.

Resistance:

$4,452 → $4,487 → $4,515 per ounce

A sustained move above $4,487 could open the way toward $4,543 per ounce.

Support:

$4,396 → $4,341 → $4,319.60 per ounce

A break below $4,396 could extend downside pressure in the near term.

Market Outlook

Gold is currently caught between two opposing forces:

Geopolitical tensions → support safe-haven demand

while at the same time,

Higher oil prices + elevated Treasury yields + stronger Fed rate-hike expectations → pressure gold

The next major focus will be U.S. labor-market data, particularly JOLTS, ADP employment, weekly jobless claims, and the August Nonfarm Payrolls report, as these releases could influence the likelihood of a September Fed rate hike.

This article is for informational and market commentary purposes only and should not be considered investment advice.

Source: Kitco