Gold prices hover near seven-week lows as Fed rate hike pressure intensifies.

Gold prices maintained sharp losses as the ongoing stalemate between the US and Iran in the Strait of Hormuz kept energy costs elevated and added pressure on the Fed to raise rates. Gold fluctuated around $4,125 per ounce after falling 4% on Monday to a seven-week low. Oil rose as Iranian officials privately expressed pessimism about reaching a deal with Washington to end hostilities before the November US midterm elections, while Trump had previously rejected Iran's latest proposal to reopen the Strait of Hormuz. Gold fell about 7% in September after the Fed raised rates for the first time since 2023 to counter inflation and signaled possible further hikes. Elevated energy prices also added pressure for rate increases, with investors now seeing about a 70% chance of a hike in October. Spot gold rose 0.2% to $4,126.52 per ounce. Silver rose 0.2% to $60.77 per ounce after falling nearly 6% in the previous session.