FX.co ★ Gold Steadies as Middle East Conflict Persists

Gold held near $4,000 an ounce on Tuesday, hovering close to its lowest level in nine months, as the escalating confrontation between the US and Iran kept investors focused on the risk of energy-driven inflation and the likelihood of higher interest rates. US strikes on Iran continued for a tenth straight day, with President Donald Trump warning that Tehran would be held responsible for the deaths of three US service members. At the same time, Iran-backed Houthi militants declared a maritime embargo on Saudi Arabia, heightening concerns over energy shipments through the Red Sea.

In parallel, Iran said mediators had put forward proposals aimed at easing tensions with the US after several days of fighting, amid reports suggesting a possible 10-day ceasefire. US Treasury yields surged earlier this week, and markets are now pricing in roughly a 55% probability of a Federal Reserve rate hike in September, up from about 51% just a day earlier.