New Delhi, June 29 -- a flight to safety, a bid for the haven. On Sunday, as fresh US-Iran strikes rippled across the Strait of Hormuz and Iranian missiles hit American military facilities in Kuwait and Bahrain, gold fell.

escalating military action near the Strait of Hormuz drives crude oil higher, higher oil stokes inflation, inflation pushes the Federal Reserve toward rate hikes, and a Fed raising rates strengthens the dollar and increases the opportunity cost of holding a non-yielding metal. The war that was supposed to send gold to $5,000 is instead pressing it toward $4,000.

The sequence of events began Saturday morning when Iran's Islamic Revolutionary Guard Corps attacked a Panama-flagged container ship, the M/T Kiku, carrying Q...