Gold falls as renewed uncertainty over the trajectory of the U.S.-Iran war gave the dollar a boost and drove oil prices higher. A stronger dollar makes gold more expensive for international holders of the precious metal.
The so-called debasement trade has fallen out of favor as both a discussion point and an investment concept.
Share markets across Asia fell on Thursday after reports of fresh US military strikes on Iran and missile attacks linked to Kuwait unsettled investors and weakened optimism surrounding a possible peace agreement in the Middle East. Oil prices surged while Treasury yields climbed as investors reacted to escalating tensions and growing concerns over inflation ahead of key US economic data.
Gold edged lower in morning trade, staying under pressure as hopes for a U.S.-Iran deal falter.
Spot gold prices are down and spot silver prices are sharply lower after the close Wednesday, as a sharp drop in crude oil and record U.S. equity closes reduced safe-haven demand tied to the Strait of Hormuz. At the time of writing, spot gold was trading near $4,454.80 an ounce, down 1.17%, while spot silver was trading near $74.665, down 3.00% on the session.
Gold remains the anchor of the new commodity cycle, and the yellow metal's secular bull market is still intact despite the recent volatility in precious metals, according to Doug Moglia, macro and market strategist at Rockefeller Global Investment Management.
Gold rose in Asian trade, rebounding from a fall in the prior session.
Gold continues to trade in a tight consolidation beneath key resistance, with a symmetrical triangle and falling wedge pattern signaling mounting compression and a potential volatility-driven breakout once direction resolves.
Although gold and silver are stuck in neutral as rising inflation fears cool investor interest, the current price action doesn't take away from the unprecedented demand for bullion, as the British Royal Mint reported record demand early in the year.
Precious metals are continuing to be impacted by rising inflation and shifting rate expectations, while both gold and silver demand are being reshaped by India's new import tariff regime, according to precious metals analysts at Heraeus.In their latest update, the analysts noted that both U.S. consumer and producer prices continued to rise last month, while the Personal Consumption Expenditures (PCE) index is also expected to climb further above the Fed's 2% target.
Precious metals markets moved lower as U.S. and Iran exchanged strikes despite ceasefire.
The gold market continues to hold support above $4,500 an ounce but is struggling to attract new bullish momentum, even as U.S. consumer confidence continues to fall amid rising inflation pressures and growing recession risks.