Gold Plummets Below $4,300 On Inflation, Rate Hike Jitters

(RTTNews) - Gold prices crashed on Monday due to inflation and rate-hike fears. Spot gold traded 4.7 percent lower at $4,279.27 an ounce, after having slumped to a low of $4,099.55 earlier. U.S. gold futures were down 6.4 percent at $4,315.54.

As the Iran war pushes global energy prices higher, it is feared that cost-driven inflation may prompt major global central banks to maintain a hawkish stance in the coming months.

A slew of major central banks signaled last week that they were prepared to raise interest rates to combat inflation.

Federal Reserve Chair Jerome Powell's tone and the guidance on March 18 suggested that a rate hike is not off the table, but it's unlikely for now.

The dollar rose and Treasury yields hovered near an eight-month high as investors fret about the spillover effects of elevated energy costs from the Middle East conflict to inflation and global economic growth.

Risk-off sentiment prevailed in financial markets after Washington and Tehran threatened to escalate hostilities.

U.S. President Donald Trump has threatened military action against Iran's power plants unless the Strait of Hormuz reopens within 48 hours.

Iran warned it would strike energy and water infrastructure across the Gulf in retaliation if Trump follows through with his threat.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that any attack on Iran's power plants would trigger irreversible damage to regional energy and desalination infrastructure.

Ghalibaf also said entities that finance the U.S. military budget are "legitimate targets" for the country, alongside military bases.