Gold Prices Decline as US-Iran Uncertainty Weighs on Markets
Gold prices moved lower during Asian trading on Thursday, as investors assessed mixed signals surrounding the conflict between the United States and Iran. A stronger U.S. dollar also reduced the appeal of the precious metal.
Spot gold fell 1.1% to $4,457.06 per ounce, while U.S. gold futures dropped 2.2% to $4,485.10.
Recent Rebound Loses Momentum
Earlier in the week, gold had recovered from recent losses, briefly rising above $4,500 per ounce. The rebound was supported by a weaker dollar and cautious optimism around diplomatic efforts between Washington and Tehran.
However, the rally proved short-lived as uncertainty over the geopolitical situation continued to limit upside potential.
Iran Reviews US Proposal Amid Ongoing Tensions
Iran is currently reviewing a U.S. proposal aimed at ending hostilities, but the outlook for negotiations remains unclear.
While Tehran has not officially accepted the proposal, it has also avoided rejecting it outright, leaving room for cautious optimism. At the same time, Iranian officials have ruled out direct talks with Washington, highlighting ongoing disagreements.
The lack of clarity has kept markets on edge, with oil prices continuing to rise amid the uncertainty.
Strong Dollar and Rate Expectations Pressure Gold
Despite being traditionally viewed as a safe-haven asset, gold has shown increased volatility in recent weeks.
Expectations of higher interest rates for a longer period, combined with a stronger U.S. dollar, have weighed heavily on gold prices. Rising oil prices have also fueled inflation concerns, reinforcing the likelihood that central banks will maintain tighter monetary policy.
This environment tends to pressure non-yielding assets like gold.
The U.S. Dollar Index remained largely stable on Thursday after posting gains over the previous two sessions.
Other Metals Also Decline
Other precious metals followed gold lower. Silver fell 1.8% to $69.97 per ounce, while platinum dropped 1.8% to $1,897.60 per ounce.
In industrial metals, copper futures on the London Metal Exchange declined 1.3% to $12,177.0 per ton, while U.S. copper futures slipped 0.5% to $5.49 per pound.
