Gold nears $4,000 on U.S.-Iran tensions, Fed rate fears

Gold nears $4,000 after U.S.-Iran tensions and Fed rate fears, as investors shift to yield-sensitive assets amid ongoing uncertainty.

Gold prices dropped close to $4,000 per ounce after renewed military exchanges between the United States and Iran in the Persian Gulf. This escalation reignited inflation concerns and expectations that the Federal Reserve will maintain a restrictive monetary policy. Although both countries agreed to suspend hostilities and plan to meet in Doha for further discussions, uncertainty persists. As a result, investors have reduced their demand for gold as a safe haven, shifting instead to assets more sensitive to real yields, such as TIPS. Since late February, when joint U.S. and Israeli military operations against Iran began, gold has lost about 23% of its value. The market remains focused on upcoming U.S. employment data and developments in nuclear talks, both of which could influence gold prices and expectations for future Fed rate hikes.