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(Bloomberg) -- Gold sank for a seventh session as the escalating war in the Middle East drove oil prices higher and reduced prospects for a US interest-rate cut in the near term.

Gold fell as much as 6.6%, with the decline putting it on track for its longest losing streak since 2023. Roughly three weeks into the Iran war, soaring crude and gas prices are raising inflationary risks, making rate cuts by the Federal Reserve and other central banks less likely. That’s a headwind for the metal, which doesn’t pay interest. Silver plunged more than 13% before trimming losses.

Brent oil extended gains on Thursday following attacks on some of the Middle East’s most important energy facilities. A day earlier, the Fed held interest rates steady and projected just one cut this year, with Chairman Jerome Powell saying a reduction would be dependent on slower inflation.

“It’s an interest rate and oil story here,” said Bart Melek, global head of commodity strategy at TD Securities. “People are worried we will get slower growth and inflation, with the Fed and others tightening policy.”

Global stocks and bonds sold off amid the escalating Iran war and surging energy prices. That forced some investors to sell their positions in precious metals to raise cash, according to Melek.

Some investors are pulling money from precious metals to redirect into investments that stand to benefit from higher energy prices, according to Aakash Doshi, global head of gold and metals at State Street Investment Management.

Shares of gold producers tumbled, while VanEck Gold Miners ETF, the world’s largest exchange-traded fund tracking gold mining companies, erased this year’s gains.

Gold’s performance since the war broke out mirrors its decline through mid 2022, when Russia’s invasion of Ukraine caused an energy price shock that rippled through global markets. While volatility in precious metals has calmed somewhat compared with the wild price swings in January, fluctuations have scared off some investors seeking a haven.

Gold-backed ETFs, a popular way to hold the metal for Western retail and institutional investors, have seen persistent outflows in recent weeks, weighing on prices. ETF demand for gold tends to be particularly sensitive to interest-rate changes.