FX.co ★ Gold Prices Dip on Inflation Fears

Gold prices reversed early gains to fall to $4,470 per ounce in the first trading session of June, approaching their lowest level since late March. Rising oil prices—driven by renewed Iran–US strikes and Iran’s decision to suspend communications with Washington in protest over Israel’s attacks on Lebanon—have heightened inflation concerns and reinforced expectations that central banks will keep interest rates higher for longer.

Over the weekend, both sides exchanged proposals to amend a draft agreement aimed at extending the ceasefire and reopening the Strait of Hormuz, though it remains uncertain whether any substantial progress was achieved. Markets now assign roughly a 50% probability to at least one US rate hike by year-end. Investors are shifting their attention to this week’s US labor market data and forthcoming comments from Federal Reserve officials. In his first public remarks since his term as Fed Chair ended on May 15, Governor Jerome Powell warned of the risks posed by a politicized central bank.