Gold futures prices plunged more than 3.5% on Wednesday. The decline represents the largest single-day percentage loss in over two months. Prices reached an 11-week low, marking a fourth consecutive session of losses. This sell-off erased all of the precious metal's gains for 2026.
Rising oil prices spurred by U.S.-Iran hostilities drove the market movement. Investors expect these energy costs to accelerate inflation and trigger a hawkish Federal Reserve response. Traders now price in a 70% probability of an interest rate hike by the end of the year. Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.