Gold slipped sharply on the back of a fresh flare‑up between the United States and Iran that saw both sides exchange a series of retaliatory strikes over the weekend. The renewed hostilities pushed energy prices higher, reinforcing fears that the Federal Reserve may need to raise interest rates to tame inflation.

The spike in oil prices added pressure on global financial markets, causing investors to seek safer assets and prompting a shift away from commodities like gold. Analysts noted that the volatility in the energy sector has made the outlook for monetary policy less certain, with a higher probability of rate hikes now on the table.

The situation underscores how geopolitical tensions can ripple through commodity markets, affecting everything from inflation expectations to central bank policy decisions. Investors are closely monitoring the U.S. Treasury and Fed statements for any signals that could further influence gold’s performance and overall market sentiment.