Gold prices fell for a fourth consecutive session on Wednesday, pressured by a stronger U.S. dollar and rising expectations of a Federal Reserve rate hike, as fresh U.S. strikes on Iran kept energy-driven inflation concerns in focus.

Spot gold slipped 1.5% to $4,195.85 per ounce by 03:26 ET (07:26 GMT), reaching its lowest level since March 23.

U.S. Gold Futures also dropped 1.6% to $4,217.75, as investors reduced exposure ahead of key U.S. consumer price index (CPI) data due later on Wednesday.

Washington launched new strikes on Iranian targets on Tuesday following the downing of a U.S. military helicopter near the Strait of Hormuz, reigniting fears of broader disruptions to global energy supplies.

Iran said on Wednesday that it had targeted U.S. bases in Jordan and several Gulf states in response to the U.S. attacks.

Oil prices rose around 1% on Wednesday, adding to concerns that higher fuel costs could feed into inflation and complicate the Federal Reserve’s policy outlook.

The prospect of persistent inflation has prompted investors to scale back expectations for U.S. rate cuts. 

More than 70% of market participants are pricing in a Fed rate hike by December.

Higher interest rates tend to weigh on non-yielding bullion by increasing the opportunity cost of holding the precious metal.

Treasury yields remained near multi-month highs while the dollar stayed firm ahead of the inflation report.

The U.S. Dollar Index traded flat near a two-month peak hit earlier this week.

Investors are closely watching the CPI data for signs of whether inflationary pressures are accelerating. Economists expect annual consumer inflation to rise to around 4.2% in May, which would mark the highest reading since April 2023 and could reinforce expectations that the Fed will maintain a restrictive policy stance.

Among other precious metals, silver prices fell 1.4% to $64.42 per ounce, while platinum dropped 3% to $1,678.05/oz.

Benchmark Copper Futures on the London Metal Exchange edged down 0.2% to $13,548.33 a ton, while U.S.Copper Futures fell 0.3% to $6.30 a pound.