Gold prices declined in Asian trading on Thursday, returning to the trading range seen over the past week as the ongoing conflict involving the United States, Israel, and Iran continued to support demand for oil and the U.S. dollar. Rising geopolitical tensions have redirected investor attention toward energy markets and the dollar, putting short-term pressure on bullion prices.
Despite the pullback, gold remained relatively resilient, continuing to fluctuate within the $5,000 to $5,200 per ounce range. Safe-haven demand linked to geopolitical uncertainty has helped limit deeper losses in the precious metal.
Spot gold dropped 0.6% to $5,147.05 per ounce at 01:33 ET (05:33 GMT), while gold futures slipped 0.5% to $5,151.86 per ounce.
Gold pressured as Iran conflict boosts oil and dollar
Gold prices weakened as ongoing hostilities between the United States, Israel, and Iran kept financial markets focused on rising oil prices and a stronger U.S. dollar. The dollar index climbed 0.2% in Asian trading and hovered close to a two-month high, making gold more expensive for buyers using other currencies.
Meanwhile, oil prices surged sharply, briefly moving above $100 per barrel after reports that two international oil tankers were struck near Iraq. Additional reports indicated that Oman evacuated a major oil export terminal, while Iran was seen blocking the Strait of Hormuz, a crucial shipping route responsible for roughly one-fifth of global oil supply.
The jump in oil prices raised concerns about a potential long-term increase in global inflation. Higher inflation expectations could push central banks, including the Federal Reserve, toward a more hawkish monetary policy stance. Such a scenario typically weighs on gold because higher interest rates increase the opportunity cost of holding non-yielding assets like precious metals.
Other precious metals decline amid volatile markets
Other precious metals also edged lower on Thursday. Spot silver slipped 0.2% to $85.56 per ounce, while platinum fell 0.1% to $2,167.26 per ounce.
Metal markets have experienced sharp swings this week as investors react to conflicting signals surrounding the Iran conflict. U.S. President Donald Trump and several officials suggested the war could end soon, but continued military activity between the United States, Israel, and Iran has kept markets cautious.
Inflation data keeps investors focused on Fed policy
Gold briefly climbed above the $5,200 per ounce level on Wednesday but retreated after the release of U.S. consumer price index (CPI) data. The report showed inflation largely in line with expectations, offering limited clarity about future price pressures.
However, the data did little to ease concerns that rising oil prices linked to the Iran conflict could trigger stronger inflation in the months ahead.
Markets are now closely watching the upcoming release of the U.S. Personal Consumption Expenditures (PCE) price index scheduled for Friday. The PCE index is the Federal Reserve’s preferred measure of inflation and plays a key role in shaping expectations for future interest rate policy.
Although the data is unlikely to fully reflect the recent surge in energy prices caused by the Iran conflict, it may provide important insights into inflation trends in the world’s largest economy during the first month of 2026.
