Gold futures fell to a two-week low on Wednesday as escalating U.S.-Iran tensions and growing expectations for a Federal Reserve interest-rate hike drove a broad market selloff across risk assets and sovereign bonds.
The latest round of strikes between Washington and Tehran followed U.S. military action on Tuesday targeting Iranian military sites in southern Iran, including air defense systems, radar installations and maritime assets near the Strait of Hormuz. Iran responded with retaliatory missile strikes against U.S. bases in Bahrain, Jordan and Iraq, according to U.S. Central Command and Iranian state media. Kuwait’s air defenses also intercepted Iranian drones and missiles, the government said.
The conflict has pushed energy prices higher and reignited inflation concerns, pushing U.S. 10-year Treasury yields to a near three-year high, 30-year yields to a 30-year peak and German 10-year Bund yields to a 15-year high. Benchmark bond yields rose across major markets, lifting borrowing costs for governments and households. Equities and gold also came under pressure as investors reassessed risk.
Gold futures declined for a fourth consecutive session, dropping roughly 8% from last week’s record near $4,700 to trade around $4,370 by midday in New York. The decline followed a 70-degree slide since August 25, when prices peaked at $4,755.80. Analysts noted that gold is trading below both the 100-day and 200-day exponential moving averages ($4,391.52 and $4,548.11, respectively), with a daily bearish crossover pattern in place.
Technical support is seen at the 50-day EMA around $4,256, which the analysis suggests could be tested in coming sessions. Meanwhile, money-market pricing indicates a more than 60% probability of a 25-basis-point Fed rate increase at the September 15–16 policy meeting, according to CME FedWatch data.
The analysis cautions that while geopolitical risk and rate expectations are weighing on gold, price action remains sensitive to further developments in the U.S.-Iran conflict and central-bank policy signals.
