Gold at two month low amid escalating inflation concerns pressure
Gold prices fell to their lowest level in two months on Thursday, as new US strikes on Iran pushed oil prices higher, raising concerns about increased inflation and casting a shadow over interest rate expectations.
By 04:09 GMT, spot gold fell 1.7% to $4,380.62 per ounce after earlier dropping to its lowest level since March 26, while US gold futures for June delivery declined 1.6% to $4,377.10, as the dollar rose to a one-week high increasing the cost of dollar-priced gold for holders of other currencies.
A US official said the military carried out new strikes in Iran targeting a military site that officials concluded posed a threat to US forces and commercial shipping through the Strait of Hormuz, hours after President Donald Trump denied an Iranian report about a deal to restore traffic through the strategic waterway, with oil prices jumping more than 3% after the Iranian Revolutionary Guard announced targeting a US air base in response.
Stone X senior analyst Matt Simpson said geopolitical disruptions continue to escalate and that demand for the dollar will remain sustained meaning gold is likely to remain under pressure, while Federal Reserve board member Lisa Cook said she is prepared to raise interest rates if necessary given tariffs, the Iran war, and rising prices.
Investors are awaiting US Personal Consumption Expenditures data due later today for clues on the US monetary policy path, while silver fell 3% to $72.37 per ounce, platinum lost 1.4% to $1,890.81, and palladium declined 1.9% to $1,364.26.
