Gold Prices Fall as Iran Escalation Boosts Dollar Demand
Gold prices declined on Thursday, with futures set to snap a four-day winning streak, as investors reacted to renewed escalation signals from U.S. President Donald Trump regarding the conflict with Iran.
Trump’s Remarks Weigh on Market Sentiment
President Trump warned that the United States would strike Iran “extremely hard” in the coming weeks, while offering no clear plan for reopening the critical Strait of Hormuz. The strong rhetoric dampened hopes for de-escalation and increased uncertainty across financial markets.
Oil Surge and Strong Dollar Pressure Gold
Following Trump’s comments, oil prices surged sharply, fueling expectations that interest rates could remain higher for longer. At the same time, investors shifted into the U.S. dollar as a safe haven, putting downward pressure on gold prices.
At 16:23 ET, spot gold fell 2% to $4,665.07 per ounce, while U.S. gold futures dropped 2.5% to $4,692.67 per ounce.
Rally Reverses After Recent Gains
Gold had been on a strong upward trend, with spot prices rising for three consecutive sessions and futures gaining for four days. The rebound came after a difficult March, when gold recorded its worst monthly performance since October 2008.
However, the latest geopolitical developments reversed momentum, as investors reassessed risk exposure.
Investor Concerns Rise Amid Escalation
Markets reacted negatively to Trump’s aggressive stance, especially after earlier signals had pointed toward possible de-escalation. Analysts noted that investors were expecting clearer guidance on how and when the conflict might end.
Instead, the renewed escalation pushed crude oil prices significantly higher, adding further pressure to global markets.
UBS Lowers Gold Forecast
UBS expects gold prices to remain volatile in the near term as geopolitical risks continue to evolve. The bank highlighted that ongoing uncertainty could lead to choppy price movements in the coming weeks.
The bank lowered its average gold price forecast for the year to $5,000 from $5,200, while maintaining its year-end target at $5,600.
Other Precious Metals Show Mixed Performance
Silver prices declined by 3.2% to $72.66 per ounce, while platinum posted modest gains, rising 0.6% to $2,001.15 per ounce.
Base Metals in Focus Amid Tariff Moves
Attention also shifted to base metals after the U.S. administration introduced stricter tariff rules on steel, aluminum, and copper imports. The new framework includes a 50% tariff on certain primary metal products and a 25% rate on derivative goods.
Aluminum prices have surged close to four-year highs due to supply disruptions linked to the Middle East conflict.
Meanwhile, copper markets showed mixed performance, with London Metal Exchange futures rising slightly while U.S. copper futures edged lower.
