NEW YORK (Reuters) – Gold soared to an almost six-year high on Tuesday on escalating U.S.-Iran tensions, while equity markets slid on disappointing economic data and uncertainty on whether the Federal Reserve will cut interest rates in July as has been expected.

Fed Chairman Jerome Powell said in a speech the U.S. central bank is insulated from short-term political pressures as policymakers wrestle with whether to cut rates amid slowing growth as President Donald Trump has demanded.

Equity markets have rallied this month in anticipation that Fed policymakers would cut rates, but Powell’s remarks cast doubt on those expectations when he referred to the Fed’s independence.

“Clearly, he’s referring to comments from the White House,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. “The market wants to hear the Fed remains steadfast – what it perceives is the correct path to follow in terms of monetary policy, rather than acquiescing to the administration.”

The dollar rebounded and gold prices retreated after Powell’s comments trimmed market expectations that the U.S. central bank will cut rates by half a percentage point next month.

Gold had gained 10% in price so far in June, climbing above $1,400 an ounce for the first time since August 2013 after briefly touching the psychological barrier on Monday.

The dollar had fallen to a three-month low against the euro and dropped to its weakest against the Japanese yen since early January as the prospect of a Fed rate cut eroded demand. The yen also benefited from concerns about U.S.-Iranian tensions.

Tehran said new U.S. sanctions permanently closed the path to diplomacy between the two countries.

The dollar index rose 0.19%, while the euro reversed course to fall 0.25% to $1.1369. The yen strengthened 0.1% versus the greenback at 107.17 per dollar.

Disappointing economic data weighed on stocks.

U.S. consumer confidence tumbled to a 21-month low in June as households grew a bit more pessimistic about business and labor market conditions amid concerns of an escalation in the trade tensions between the United States and China.

The U.S. economy’s prospects were further dimmed by other data showing sales of new single-family homes unexpectedly fell for a second straight month in May.

MSCI’s gauge of global equity markets, most major European indexes and stocks on Wall Street slipped.

MSCI’s gauge of stocks across the globe shed 0.73%, while the pan-European STOXX 600 index closed down 0.1%.

The Dow Jones Industrial Average fell 179.32 points, or 0.67%, to 26,548.22. The S&P 500 lost 27.97 points, or 0.95%, to 2,917.38 and the Nasdaq Composite dropped 120.98 points, or 1.51%, to 7,884.72.

U.S. benchmark Treasury yields fluctuated around the key 2% level as investors weighed the outlook for the U.S.-China trade spat against the prospect that the Fed may be less dovish than traders expect.

The benchmark 10-year Treasury note rose 8/32 in price to push yields down to 1.9918%.

Trump threatened to obliterate parts of Iran if it attacked “anything American,” in a new war of words. Tehran condemned the latest U.S. sanctions on Iran and called White House actions “mentally retarded.”

Trump is due to meet one-on-one with at least eight world leaders at the G20 summit in Osaka, Japan, at the end of the week, including Chinese President Xi Jinping, for discussions on trade, and Russian President Vladimir Putin.

Chinese investors seemed none too hopeful as Shanghai blue chips slipped 1%. Japan’s Nikkei dropped 0.4%.

Oil prices rose slightly ahead of U.S. data expected to show crude stocks declining there, outweighing investors’ concerns that U.S.-China trade tensions could weigh on fuel demand.

Benchmark Brent crude futures rose 19 cents to settle at $65.05 per barrel.

U.S. crude futures slid 7 cents to settle at $57.83 a barrel.

U.S. gold futures were little changed on settlement at $1,418.7 an ounce.