Gold Declines Below $4,550 on Rising Fed Hike Expectations

• Gold price edges lower to near $4,535 in Monday’s early Asian session. 
• Trump said his patience with Iran was running out. 
• The potential upside for the yellow metal seems limited as bets on Fed rate hikes grow. 

Gold price (XAU/USD) declines to around $4,535 during the early Asian trading hours on Monday. The precious metal remains on the defensive as heightened inflation concerns, due to the conflict in the Middle East, reinforce bets for higher interest rates.

US President Donald Trump on Sunday threatened Iran to “get moving,” or seemingly face new consequences. He left ‌China with no major breakthroughs on trade or tangible ‌help to end the war.

“The Chinese really didn’t offer much help in resolving the conflict, and we’re seeing crude oil move up, which reinforces the inflation narrative, and that’s been very bearish for the metals,” said Edward Meir, an analyst at Marex.

CNBC reported that the US is demanding that Iran abandon its nuclear program and reopen the Strait of Hormuz. Meanwhile, the Mehr news agency said Washington offered “no tangible concessions” while seeking “to obtain concessions that it failed to obtain during the war, which will lead to an impasse in the negotiations.”

Traders have largely priced ‌out US interest rate cuts this year while expectations for a hike have risen, according to CME’s FedWatch Tool. It’s worth noting that Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.