Gold Prices Slip as Middle East Tensions Weigh on Sentiment
Gold prices edged lower during Asian trading on Thursday, following modest gains in the previous session. Investors remained cautious as renewed tensions in the Middle East threatened the stability of the fragile U.S.-Iran ceasefire.
Spot gold declined 0.3% to $4,704.96 per ounce, while U.S. gold futures dropped 1% to $4,731.84 per ounce.
Ceasefire Fails to Fully Calm Markets
Gold had closed 0.3% higher on Wednesday, after briefly surging as much as 3% earlier in the session. The initial rally was driven by optimism surrounding a temporary ceasefire between the United States and Iran.
The truce, brokered by Pakistan, aims to pause hostilities for two weeks and ensure the reopening of the strategically important Strait of Hormuz. However, lingering uncertainty has kept markets on edge.
Rising Geopolitical Risks Renew Uncertainty
Investor confidence weakened as Israeli strikes on Lebanon continued, raising concerns about whether the ceasefire can hold. Iran signaled that peace negotiations with the U.S. would be “unreasonable” under current conditions.
Officials in Tehran warned that ongoing military actions could undermine trust and derail future talks, highlighting deep disagreements over the ceasefire’s scope and enforcement.
Oil Rebound Adds Inflation Pressure
Oil prices recovered slightly on Thursday after sharp declines in the previous session. The rebound has contributed to renewed inflation concerns, which have weighed on gold despite its traditional role as a safe-haven asset.
Higher energy costs are expected to feed into broader price pressures across the global economy.
Focus Shifts to US Inflation Data
Markets are now closely watching the upcoming U.S. consumer price index (CPI) data for March, set to be released on Friday. The report is expected to offer key insights into inflation trends and the Federal Reserve’s future monetary policy direction.
A potential increase in inflation, driven by recent oil price volatility, could influence interest rate expectations.
US Dollar Stabilizes After Decline
The U.S. dollar steadied after falling 0.7% in the previous session, limiting further upside in gold prices. A stronger dollar typically makes bullion more expensive for global buyers, reducing demand.
Other Precious Metals Also Decline
Elsewhere in the metals market, silver prices dropped 1.3% to $73.16 per ounce, while platinum fell 0.9% to $2,011.14 per ounce, tracking broader weakness across the sector.
