Reports: Iran Could Expand Its Blockade... Oil Up 15% in Two Weeks, Gold Pressured

Gold dropped 0.51% during Tuesday's trading, as US Treasury yields resumed their rise alongside a strong rally in oil prices, according to an analysis by "FXStreet" cited by the "Mitrade" platform.

The 10-year US Treasury yield approached 5.15%, while oil gained nearly 15% over two weeks, reinforcing fears of returning inflationary pressures and keeping the opportunity cost of holding gold elevated.

Reports indicated that Iran might expand the scope of its blockade to include the Bab al-Mandeb Strait and the Suez Canal, and that it has prepared a new retaliation plan against any US-Israeli attack, according to a warning over the weekend by Mohsen Rezaei, a member of Iran's Supreme National Security Council. This comes as risks threatening energy supplies in the region continue.

The US Federal Reserve entered its blackout period ahead of its monetary policy meeting, after officials emphasized the target of lowering inflation to 2% without showing any urgency to raise interest rates again, while the "FedWatch" tool shows traders' confidence in keeping rates unchanged in October and raising them in December.

What Do These Terms Mean?

Treasury Bond Yield: The rate earned by a government bondholder on their investment, and its rise makes gold less attractive.

Bab al-Mandeb Strait: A narrow waterway connecting the Red Sea to the Gulf of Aden, considered one of the most important routes for global oil trade.

FedWatch Tool: A tool measuring traders' expectations for interest rate decisions based on futures contract prices.

Monetary Tightening: Raising interest rates or reducing liquidity to curb inflation, which often reduces gold's appeal.