Gold Prices Fall Sharply as Rally Ends
Gold prices dropped nearly 4% on Thursday, ending a four-day winning streak as markets reacted to renewed geopolitical tensions. The decline followed comments from U.S. President Donald Trump signaling a potential escalation in the Iran conflict.
Spot gold fell 3.6% to $4,587.70 per ounce, after earlier reaching a session high of $4,800.58. U.S. gold futures also declined, dropping 4.1% to $4,614.59 per ounce.
Precious Metals Under Pressure
The sell-off extended across the broader precious metals market. Silver prices plunged 6.2% to $70.42 per ounce, while platinum fell 1.7% to $1,904.60 per ounce.
Gold had previously gained over four consecutive sessions, supported by easing geopolitical concerns and lower oil prices before the latest developments reversed sentiment.
Trump Signals Escalation in Iran Conflict
Market sentiment shifted after Trump stated that the United States would intensify military operations against Iran over the next two to three weeks. He reiterated Washington’s objective of preventing Iran from developing nuclear capabilities.
The comments marked a shift from earlier signals suggesting a possible military withdrawal, increasing uncertainty across financial markets.
Markets React to Rising Geopolitical Risks
Investors remain highly sensitive to developments in the Middle East, with shifting political rhetoric driving volatility. The renewed escalation narrative prompted a reassessment of risk across asset classes.
Oil and Dollar Strength Weigh on Gold
Oil prices rebounded strongly following Trump’s speech, fueling concerns about higher inflation. Rising inflation expectations could keep interest rates elevated, reducing the attractiveness of non-yielding assets like gold.
At the same time, the U.S. Dollar Index gained 0.5% after two days of losses, making gold more expensive for investors holding other currencies.
Focus Turns to US Economic Data
Market participants are now looking ahead to key U.S. labor market data, particularly the upcoming nonfarm payrolls report. The results are expected to provide further insight into the Federal Reserve’s monetary policy outlook.
Industrial Metals Also Decline
In the industrial metals market, copper prices also moved lower. London Metal Exchange copper futures fell 1.4% to $12,286.33 per ton, while U.S. copper futures declined 1.3% to $5.54 per pound.
