Gold Edges Lower as Fed’s Hawkish Tone Lifts Dollar; Geopolitical Tensions Limit Losses
Gold prices dipped slightly on Thursday as the Federal Reserve’s firm stance on interest rates boosted the U.S. dollar, putting downward pressure on bullion. However, escalating geopolitical risks—particularly the possibility of U.S. involvement in the Israel-Iran conflict—helped cushion gold’s losses.
As of 09:00 ET (13:00 GMT), spot gold was down 0.1% at $3,368.15 an ounce, while August gold futures dropped 0.7% to $3,384.20 per ounce.
Fed’s Cautious Approach Weighs on Gold
Gold has slipped to its lowest level in a week and is on track for a second straight daily decline after the Federal Reserve left interest rates unchanged for a fourth consecutive meeting on Wednesday. The central bank also signaled it would not rush into cutting rates, citing inflation risks linked to President Trump’s trade tariffs.
This hawkish messaging pushed the U.S. dollar higher, making gold—priced in dollars—more expensive for foreign buyers and less attractive as a result.
Typically, lower interest rates support gold by reducing the opportunity cost of holding the non-yielding metal.
Safe-Haven Appeal Keeps Gold Elevated
Despite recent losses, gold remains up over 28% for the year, underpinned by global risk aversion. Market uncertainty continues to grow due to Trump’s unpredictable trade policies, the ongoing war in Ukraine, and fresh tensions in the Middle East.
According to Bloomberg, senior U.S. officials are preparing for a possible military strike on Iran, potentially as early as this weekend. While no final decision has been announced, the report cited sources familiar with the discussions.
This follows remarks by Iran’s Supreme Leader Ayatollah Ali Khamenei, who rejected Trump’s call for unconditional surrender, warning that neither peace nor war can be imposed on Iran. Meanwhile, Trump said on Wednesday that a U.S. strike on Iran remains a possibility.
Platinum Retreats from 10-Year High
Platinum futures fell 3.2% to $1,271.75 per ounce, pulling back from their highest level since September 2014. A bullish industry outlook in late May had spurred buying, with strong demand from China’s jewelry and industrial sectors, coupled with tight inventories and elevated lease rates.
Platinum has increasingly become a popular alternative to gold among investors adjusting to shifting market conditions.
Other Metals Fall on Stronger Dollar
The broader metals market also trended lower on Thursday as the U.S. dollar gained strength following the Fed’s rate announcement:
- Silver futures fell 1.6% to $36.315 per ounce
- London copper futures dipped 0.7% to $9,607.00 per ton
- U.S. copper futures slid 1% to $4.8070 per pound
