FX.co ★ AB2 | XAU/USD, GOLD

XAU/USD Despite escalating global tensions, gold's attraction is diminished by the resurgence of demand for the US dollar. Fears of a fresh escalation in the Middle East are rekindled when Donald Trump declares that the memorandum of understanding with Iran is no longer in effect. The Federal Reserve's June meeting minutes are currently anticipated by investors for new information about the direction of interest rates. Due to investors' preference for the US dollar (USD) in the wake of a recent worsening of relations between the US and Iran, gold (XAU/USD) is trading at about $4,050 on Wednesday, down 1.40% on the day at the time of writing. Despite the increasingly precarious geopolitical environment, the precious metal is still under pressure since investors anticipate that continuously rising oil costs may maintain restrictive US monetary policy. Following US President Donald Trump's declaration that the memorandum of agreement intended to settle the war with Iran was now "over," market sentiment declined. Along with proposing economic sanctions against Spain and reiterating his criticism of the North Atlantic Treaty Organization (NATO), Trump also said that he no longer wanted to engage with Iran. The US dollar was strengthened by these comments, and oil prices increased due to growing worries about interruptions in global supply. After US missiles attacked Iranian military installations in retaliation for attacks on commercial ships passing through the Strait of Hormuz, tensions increased. A large portion of the world's oil shipments travel through this vital canal, and the breakdown of the agreement with Iran has rekindled worries about its security. Market players worry that a more widespread dispute may maintain high energy costs and create fresh inflationary pressures.