Why gold is sliding despite fresh US-Iran strikes: is $4,000 next?

Gold slipped below $4,300 an ounce on Wednesday, extending its decline to a fourth session as rising oil prices, higher Treasury yields and a firmer dollar outweighed the metal’s usual safe-haven appeal.

Spot gold traded around $4,300 in Asian hours after touching its lowest level since early August, while December US futures fell towards $4,350.

The move leaves bullion well below its 200-day moving average and roughly 9% under last week’s three-month high.

Renewed US-Iran fighting has pushed Brent above $95 and the 10-year Treasury yield close to 4.8%, reinforcing expectations that the Federal Reserve may need to raise rates again this month.

Oil is hurting gold through the rates channel

The latest Middle East escalation is producing an unusual reaction in precious metals.

Rather than driving a straightforward rush into gold, the conflict is lifting crude prices and inflation expectations, which in turn are pushing bond yields higher.

ANZ Research, in comments carried by The Wall Street Journal, said gold is being weighed down by the combination of Middle East tensions, a stronger dollar and rising yields.

Its assessment is that higher energy costs strengthen the case for tighter monetary policy, offsetting some of the haven demand that would normally benefit bullion.

That dynamic was visible across markets on Tuesday. Brent surged almost 5% to around $95 a barrel, while the 10-year Treasury yield approached 4.8%, its highest since early 2025.

Markets are now assigning roughly a two-thirds probability to a quarter-point Fed increase in September.

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Technical damage puts $4,300 in focus

The selloff has also become increasingly technical.

Gold broke below its 200-day moving average late last week and has since sliced through shorter-term support levels.

Analysts identified the $4,329-$4,311 area as an important support cluster. A sustained break below that zone could expose $4,216 and $4,203.

On the upside, the first meaningful resistance sits around $4,450, followed by roughly $4,532. Recovering those levels would be needed to repair the near-term structure.

Blue Line Futures strategist Phil Streible told Kitco News before Tuesday’s drop that a close below $4,350 would materially weaken his bullish view because it would effectively erase the August breakout.

Gold has now traded through that threshold, suggesting momentum has shifted decisively towards sellers in the short term.

Jobs data could decide whether selling deepens

The next catalyst is the US labour market.

The ADP employment report is due Wednesday, followed by the more important August nonfarm-payrolls report on Friday.

Economists expect payroll growth to remain subdued after July’s surprise contraction, making labour data the clearest potential counterweight to the Fed’s renewed inflation focus.

Ole Hansen, head of commodity strategy at Saxo Bank, told Kitco News that gold is being pressured by short-term inflation fears tied to commodities, even though the longer-term case remains supported by fiscal concerns and broader inflation risk.