Gold prices extend decline as gram, quarter and Cumhuriyet gold rates fall

Gold prices came under heavier selling pressure on Wednesday, with spot gold falling 0.6% to $4,304.01 an ounce. The decline extended to a fourth consecutive trading session and took gold to its lowest level since Aug. 7. Prices also moved below the closely watched 200-day moving average, a technical signal followed by markets.

December futures for U.S. gold fell 1% to $4,350.80. In Turkey, gram gold traded at 6,661 lira, quarter gold at 10,821 lira and Cumhuriyet gold at 43,138 lira. Half gold stood at 21,672 lira, full gold at 43,868 lira and gremse gold at 110,007 lira. The listed ounce price was $4,301.

The decline came as conflict between the United States and Iran escalated. After U.S. airstrikes on Iran on Tuesday, Tehran responded, producing one of the most serious escalations in weeks. The higher risk of further conflict pushed oil prices up for a third straight session. Rising U.S. Treasury yields added pressure to gold.

Bas Kooijman, chief executive of DHF Capital, said higher oil prices were increasing inflation expectations. More expensive oil could strengthen expectations that central banks will keep monetary policy tight for longer. Higher interest rates reduce gold’s appeal because the metal does not provide interest income.

Markets have begun pricing in a possible Federal Reserve rate increase this month. CME FedWatch data put the probability of a 25-basis-point increase at 67%. Investors were awaiting the ADP private-sector jobs report on Wednesday and the more closely watched nonfarm payrolls data on Friday. Analysts said weak employment figures could limit gold’s decline, while strong data or further hawkish comments from Fed officials could deepen selling pressure.

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Higher oil prices are increasing inflation expectations.