Global gold price drops below $4,000

Gold price drops to $3,992. US-Iran tension flared up last weekend.

June 29 close, global gold price spot drops $73 to $4,015 per ounce. June 30 morning, price drops further to $3,992.

Spot global gold price drops from start of this week. Chart: Kitco

Price drops as US-Iran relations tense up, raising oil prices, inflation fears, interest rate hikes. "Market follows Middle East news. Price adjusts as Fed leans hawkish," Peter Grant, Zaner Metals VP, says.

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Last week, gold price fell below $4,000, hit 7-month low. Down nearly $1,600 per ounce from January peak.

June 28, Iran launched ballistic missiles, drones at US bases in Kuwait, Bahrain. Action retaliated against earlier US airstrikes on coastal facilities in Sirik, Qeshm Island.

Crude oil prices jumped after attacks. WTI, Brent trade around $70-$73 barrel.

Gold is traditional hedge, but high energy prices raise inflation, rate hike fears. Bad for non-yielding gold.

This month, Fed kept rate unchanged. Officials expect one rate hike this year. US inflation stays above 2% target.

Dollar Index tracks strongest monthly gain in year. Strong dollar makes gold expensive for foreign buyers.

This week, investors watch US jobs report for Fed policy clues. "Gold might hit new low if jobs data stays strong, backing Fed higher-for-longer rate view," Grant says.

Investors bet 63% chance Fed raises rates in September.