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Gold on Track for Worst Month Since 2008 as Iran War Enters Fifth Week

Gold is set for its largest monthly decline since 2008, with a projected 14.6% drop, despite a recent price increase. The U.S.-Iran conflict, now in its fifth week, initially boosted gold as a safe haven but rising oil prices have fueled inflation fears. President Trump signaled a readiness to end hostilities under certain conditions while threatening Iranian infrastructure, and Secretary of State Rubio expects U.S. goals to be met within weeks. The deployment of 2,500 U.S. Marines escalates tensions, contributing to expectations of global interest rate hikes to combat inflation, which further pressures gold prices.

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Gold on Track for Worst Month Since 2008 as Iran War Enters Fifth Week

Gold prices edged higher on Tuesday but are poised for their steepest monthly decline since October 2008, driven by prolonged U.S.-Iran tensions and rising inflation expectations.

Market Movement

  • U.S. spot gold rose approximately 1% to $4,553.69 per ounce by 3:30 a.m. ET, while front-month futures gained 0.6% to settle around $4,553.
  • Despite the daily gain, spot gold is on track for a monthly drop of 14.6%, marking the worst performance since October 2008 when prices fell 16.8%.

Iran Conflict Developments

  • The U.S.-Iran war has entered its fifth week, with President Donald Trump stating he is willing to end military hostilities if the Strait of Hormuz remains largely closed, according to The Wall Street Journal.
  • Trump threatened on Truth Social to attack Iranian electricity plants, oil wells, and Kharg Island if a deal is not reached soon.
  • Secretary of State Marco Rubio told Al Jazeera that U.S. objectives in Iran would be achieved in "weeks, not months."
  • Reuters reported that 2,500 U.S. Marines from the 82nd Airborne Division arrived in the Middle East over the weekend.

Economic Impact and Inflation Fears

  • Surging oil and gas prices from the conflict have raised expectations of a global inflation spike.
  • This could lead to a bout of interest rate hikes worldwide to curb inflation, adding pressure on gold as a non-yielding asset.
  • The initial safe-haven demand for gold has been offset by these macroeconomic concerns.
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