Prices nudged higher, after earlier falling toward $4,000 an ounce. President Donald Trump said he will continue bombing Iran if it refuses to agree to an interim peace deal, following a second night of clashes between the countries’ forces. Tehran said it’s completely closing the Strait of Hormuz to all vessels.

The latest attacks underscored Trump’s growing impatience that the two sides have failed to reach an agreement. Now in its fourth month, the conflict has disrupted energy flows via Hormuz, caused oil prices to rise and raised the likelihood of interest-rate hikes as central banks try to keep inflation in check. Higher rates are typically negative for gold, as it pays no interest.

US inflation accelerated in May to the fastest pace in more than three years as the war pushed up energy prices, outstripping Americans’ pay gains, according to Bureau of Labor Statistics data published on Wednesday. Bullion ended the day down more than 4%.

“The momentum is clearly on the downside,” said David Wilson, director of commodities strategy at BNP Paribas SA. “We will likely go through $4,000.”

Gold has fallen around 23% since the Iran war began at the end of February. The metal’s recent decline through its 200-day moving average has triggered additional selling as it’s seen as an important level watched by some investors.

Another telling sign of investors’ retreat from gold is the decline in open interest for Comex gold futures. Positions are near neat the lowest since 2009, resulting in thinner liquidity that can amplify price swings. Holdings in gold-backed exchange-traded funds have also declined in recent weeks, data compiled by Bloomberg show.

The latest slump “is more about deleveraging and portfolio repositioning rather than a fundamental reassessment of gold as a safe-haven asset,” Robert Gottlieb, a consultant and former precious metals trader at JPMorgan Chase & Co., wrote in a LinkedIn post.

“The constant flow of conflicting headlines is increasing uncertainties and prompting investors to reduce risk exposure and raise liquidity across a range of asset classes,” he said.