Gold Falls Below $4,080 as Hormuz Strikes Renew Inflation Focus Ahead of CPI and Warsh Testimony

Gold slipped to US$4,072.06/oz (spot) and US$4,080.22/oz (futures) on Monday, extending last week's 1.3% decline, as renewed U.S.-Iran strikes over the weekend pushed oil prices roughly 3% higher and renewed market focus on inflation. Higher Treasury yields and a firmer U.S. dollar, which have often accompanied energy-driven inflation pressures, continued to weigh on non-yielding bullion.

Ahead of Tuesday's CPI release:

1. Market consensus expects headline CPI to rise 0.1% month-on-month, compared with 0.5% in May.
2. The June FOMC meeting concluded with a 9–8 vote on whether additional policy tightening may be appropriate before year-end, while the Fed kept its policy rate unchanged at 3.50%–3.75%.
3. CME FedWatch currently indicates market pricing consistent with roughly an 80% probability of at least one 25-basis-point rate increase by year-end, with September remaining one of the meetings closely watched by market participants.

Upcoming policy events: Fed Chair Kevin Warsh is scheduled to deliver his first semiannual testimony before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Wednesday. Market participants generally do not expect explicit forward guidance, reflecting Warsh's previously stated preference for a meeting-by-meeting policy approach.

Market context: Analysts continue to monitor recent price levels alongside incoming economic data, including inflation figures, as these factors may influence expectations for monetary policy and broader market sentiment.

For market participants in Southeast Asia, the U.S. June CPI release is scheduled for 8:30 AM ET (around 8:30 PM SGT), with Warsh's testimony expected to follow later during the same trading session.

Sources: Reuters, IG, CME FedWatch, Federal Reserve