Gold Edges Lower On Inflation, Rate Hike Concerns

(RTTNews) - Gold prices fell sharply on Monday, with fresh U.S.-Iran tensions and rate hike jitters weighing on the precious metal's safe-haven appeal.

Spot gold fell 1.1 percent to $4,043.25 an ounce, after having fallen to a near eight-month low last week amid expectations that the U.S. Federal Reserve will raise interest rates this year. U.S. gold futures were down 0.90 percent at $4,059.45 an ounce.

The U.S. dollar was on track for its best monthly performance in nearly a year amid renewed uncertainty over the fragile ceasefire between the U.S. and Iran.

Brent crude futures rose above $72 a barrel, recovering from four-month lows hit last week as the United States and Iran agreed to stop attacking each other and meet Tuesday in Qatar's capital to work out their dispute over the Strait of Hormuz.

Earlier, Iran had attacked commercial vessels in the Gulf, prompting U.S. strikes on Iran's air defense sites, drone facilities and mine-laying capabilities.

Iran retaliated with strikes on U.S. bases in Bahrain and Kuwait before both sides agreed to halt strikes and meet this week.

Meanwhile, Hezbollah's leader on Saturday pilloried the Israel-Lebanon framework agreement as "null and void" and warned its implementation would trigger civil war.

The Israeli military has targeted and destroyed Hezbollah's underground infrastructure in southern Lebanon.

In economic releases, the U.S. ISM manufacturing PMI and the June U.S. jobs report will be in the spotlight this week ahead of the U.S. Independence Day holiday on Friday.

Major economies worldwide will release their June PMI data in quick succession this week.

The European Central Bank (ECB) will host its highly anticipated Forum on Central Banking in Sintra, Portugal, from June 29 to July 1, where Kevin Warsh will make his first international appearance as Fed Chair.

ECB President Christine Lagarde, BOE Governor Andrew Bailey and BOC Governor Tiff Macklem will also participate in the event and deliver speeches.