Gold drops 2% as Middle East energy tensions stoke rate hike bets

Gold plunged over 2% to around $4,053 on Thursday, its lowest level since August 4, as Middle East energy tensions fueled inflation worries and expectations that interest rates will stay elevated longer. The US and Israel have reportedly drafted plans for renewed strikes on Iran's energy infrastructure, while attacks on Saudi oil facilities have kept crude prices near five-week highs. Higher rates reduce gold's appeal as a non-yielding asset despite its safe-haven status. Traders await next week's Federal Reserve meeting, with markets pricing an 89% chance of a December rate hike. The US Dollar Index held near 101.75, while gold slipped below its lower Bollinger Band, suggesting further downside toward $4,000.