Gold Remains Subdued Near $5,000 Due To Fading Fed Rate Cut Bets

• Gold struggles as rising energy prices fuel inflation, lowering expectations of Fed rate cuts.

• US attacked Iran’s main oil export hub, Kharg Island, over the weekend, raising global supply risks.

• Safe-haven demand eases on reports that the US may announce a coalition to escort ships through the Strait of Hormuz.

Gold price (XAU/USD) loses ground for the fourth successive session, hovering around $5,000 per troy ounce during the European hours on Monday. The non-yielding metals, including Gold, continue to struggle as rising energy prices mount inflationary pressures, which have lowered expectations that the US Federal Reserve and other major central banks will cut interest rates.

The United States (US) attacked Iran’s main oil-export hub of Kharg Island over the weekend, heightening global supply risks. US President Donald Trump said oil infrastructure was not struck; however, the strike prompted retaliatory attacks from Tehran on Israel and energy infrastructure across other Arab countries. The US-Israeli war on Iran has now entered its third week with no clear resolution in sight, rattling financial markets.

The precious metals, including Gold, suffered as safe-haven demand eased after reports that the United States (US) may announce a coalition to escort ships through the Strait of Hormuz. President Trump also called on allied nations, including the UK, France, China, and Japan, to assist in securing the Strait of Hormuz. Meanwhile, European Union (EU) foreign ministers are meeting in Brussels to discuss a possible naval response to the effective closure of the Strait.

Moreover, US Energy Secretary Chris Wright said that he expects the US-Israel conflict with Iran to end within “the next few weeks,” potentially allowing oil supplies to recover and energy prices to decline.