Gold Prices Fall as Hawkish Fed Signals Offset Safe-Haven Demand

Gold prices moved lower during Asian trading on Thursday, reversing recent gains after the latest Federal Reserve meeting minutes suggested a more hawkish stance on interest rates.

Uncertainty surrounding developments between the United States and Iran also kept investors cautious, as mixed messages from both sides complicated expectations around a potential peace agreement.

Spot gold declined 0.4% to $4,526.48 per ounce, while gold futures also slipped 0.4% to $4,526.50 per ounce.

Federal Reserve Minutes Increase Rate Hike Expectations

Gold came under pressure after minutes from the Federal Reserve’s April meeting showed growing concern among policymakers over persistent inflation.

According to the meeting notes, several officials signaled openness to additional monetary tightening if inflation remains above the Fed’s 2% annual target.

Higher inflation over recent months has been largely linked to rising energy costs following conflict involving Iran and broader Middle East tensions.

The inflation surge has increased market expectations that the Federal Reserve could maintain higher interest rates for longer or potentially introduce further hikes.

Rising Bond Yields Weigh on Gold Prices

Expectations for tighter monetary policy have also driven bond yields higher, creating pressure on gold and other non-yielding assets.

When interest rates and government bond yields rise, investors often shift capital away from assets such as gold because they do not generate income.

As a result, concerns over prolonged higher rates have largely outweighed gold’s traditional role as a safe-haven investment despite ongoing geopolitical risks.

Other Precious Metals Also Decline

Weakness extended across the broader precious metals market on Thursday.

Other movements included:

• Spot platinum fell 0.8% to $1,938.92 per ounce
• Spot silver declined 0.4% to $75.53 per ounce

The declines interrupted a modest recovery seen earlier in the week.

Iran Reviews Latest U.S. Proposal While Trump Sends Mixed Messages

Iranian media reported that Tehran is reviewing Washington’s latest proposal aimed at ending the conflict.

The update follows comments from President Donald Trump, who said earlier this week that additional military action against Iran had been postponed because negotiations were progressing.

Trump indicated he was willing to wait several days for a potential agreement and suggested the conflict may be approaching its final stages.

However, he also warned that failure to reach a deal could trigger renewed U.S. military action, limiting optimism among investors.

The U.S. has repeatedly emphasized preventing Iran from developing nuclear weapons as a central objective.

Strait of Hormuz Restrictions Continue Supporting Energy Prices

Meanwhile, the Strait of Hormuz remains heavily restricted, helping keep oil prices elevated despite sharp declines earlier in the week.

The strategic waterway is one of the world’s most important routes for oil shipments, meaning prolonged disruptions continue to influence global energy markets and inflation expectations.

Higher energy costs remain an important factor affecting central bank policy, commodity prices, and broader investor sentiment.