Gold Falls To Start June As Iran War Renews Inflation Fears

(MENAFN- Yolo Wire) The price of gold bullion is falling to begin June as ongoing fighting between the U.S. and Iran renews fears of a sharp rise in inflation and the interest rates used to lower it.

Renewed missile strikes between the U.S. and Iran pushed the ​American dollar and oil ​prices higher, fueling fears of inflation and reinforcing higher-for-longer interest rates.

Spot gold's price is down 2% and trading at $4,491.20 U.S. per ounce on June 1 after hitting a two-week high on ⁠May 29.

Gold's price declined in May for a ⁠fourth consecutive month as the prospect of higher interest rates continues to weigh on the precious metal.

As a non-yielding asset, gold's price does better when interest rates move lower.

A rising U.S. dollar is also putting downward pressure on gold as the greenback competes with bullion as a store of value and makes gold more expensive for holders of other currencies.

At the same time, crude oil ‌prices are up more than 3% on June 1 amid reports that the U.S. and Iran are exchanging military fire.

The rise in tensions raises the prospect that the Strait of Hormuz waterway, where 20% of the world's crude oil is shipped, will remain closed for an extended period.

In addition to gold (TVC: $GOLD), ‌silver's price is down 1.30% on June 1 and trading at $74.89 U.S. an ounce.

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