Gold slips on fed rate hike bets

June 08, 2026 (MLN): Gold prices declined on Monday as stronger expectations of a U.S. Federal Reserve interest rate hike weighed on investor sentiment, while escalating tensions in the Middle East pushed oil prices higher and raised inflation concerns.

Currently, spot gold is slightly down 0.41% to $4,309.70 an ounce as of [1o:20 am] PST, according to data reported by Mettis Global.

The precious metal came under pressure after robust U.S. labor market data reinforced expectations that the Federal Reserve could keep monetary policy tight for longer.

Rising U.S. Treasury yields further reduced the appeal of non-yielding assets such as gold, according to CNBC. 

Market participants increased their bets on a Fed rate hike later this year, with investors reassessing the outlook for interest rates following a third consecutive month of solid job growth in the United States.

Meanwhile, geopolitical tensions intensified after Israel said it carried out strikes on military targets in western and central Iran. The developments fueled concerns over regional instability and contributed to a sharp rise in oil prices.

Higher crude oil prices have heightened fears of renewed inflationary pressures, potentially complicating the Federal Reserve’s efforts to bring inflation under control and strengthening the case for tighter monetary policy.

Comments from Federal Reserve officials also supported the hawkish outlook. Policymakers indicated that while the labor market remains near full employment, persistent inflation could require further policy action in the coming months.

As a result, investors continued to reduce exposure to gold, with expectations of higher interest rates and elevated bond yields weighing on the metal despite ongoing geopolitical uncertainty.

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