Gold Slips From Two-week High Amid Middle East Tensions

(RTTNews) - Gold prices fell from a two-week high on Thursday as escalating West Asia tensions rekindled inflation fears and clouded the outlook for interest rates.

Spot gold fell nearly 1 percent to $4,091.08 an ounce while U.S. gold futures were down 1.4 percent at $4,094.05.

Oil prices remain elevated at six-week highs on widening Middle East tensions and fears of further disruption to crude supplies after Yemen's Iran-aligned Houthis claimed an attack on two Saudi oil tankers transiting through the Red Sea.

The latest escalation has pushed WTI crude toward $90 a barrel, while Brent crude prices extended gains for a fifth straight session to surge above $98 a barrel.

Syed Abbas Araghchi, Iran's foreign minister, said his country would adopt an "eye for an eye" defense doctrine as the U.S. military carried out a 12th straight night of strikes against Iran.

U.S. Secretary of State Marco Rubio said on Wednesday that the U.S. remains open to a diplomatic settlement of the conflict, but Iran is "not serious about talks."

In a post on Truth Social, President Donald Trump threatened to bomb and destroy one Iranian bridge or power plant any time Iran shoots at a ship in the Strait of Hormuz.

Iran's Foreign Ministry spokesman Esmaeil Baqaei has warned U.S. service members against carrying out orders to attack civilian infrastructure, saying such actions could amount to war crimes.

It is feared that Brent prices could climb back above $100 a barrel soon if the Middle East conflict drags on.

The U.S. dollar extended modest losses from the previous session ahead of next week's Federal Reserve meeting, with traders expecting no change in policy rates.

The euro climbed toward a one-week high ahead of the European Central Bank's (ECB) monetary policy announcement later in the day.

Following a 25-basis point (bps) increase at the June policy meeting, the ECB is anticipated to maintain policy rates unchanged.

Traders will parse through the monetary policy statement and comments made by ECB President Christine Lagarde during the press conference concerning the inflation outlook and monetary policy.