Spot gold dropped to its lowest level since November earlier in the session before recovering some ground, while COMEX gold traded at $4,132.80 per ounce. Silver also remained under pressure, with COMEX silver down 0.23% at $64.59 per ounce.
The weakness in precious metals came after fresh US strikes on Iran intensified geopolitical tensions and pushed crude oil prices sharply higher. Oil gained more than $2 after Iran announced the closure of the Strait of Hormuz, raising concerns over global energy supplies and inflation.
While gold typically benefits from geopolitical uncertainty, the accompanying surge in energy prices has shifted investor focus toward inflation risks and the possibility of a prolonged high-interest-rate environment. Higher rates tend to reduce the appeal of non-yielding assets such as gold and silver.
Adding to the pressure, recent US data showed consumer inflation accelerated in May, supported by rising energy costs linked to the West Asia conflict. Investors are now awaiting US Producer Price Index (PPI) data for further signals on the Federal Reserve’s policy path.
In India, the global weakness was reflected in domestic markets, with MCX gold futures falling nearly 2% in the previous session and slipping below the ₹1.5 lakh per 10 grams mark after hitting highs of around ₹1.55 lakh-₹1.56 lakh earlier this month.
Rajkumar Subramanian, Head – Product & Family Office at PL Wealth, noted that while geopolitical risks generally support bullion, rising crude prices have revived concerns over persistent inflation and higher-for-longer interest rates.
Market participants will closely track developments in the West Asia, crude oil prices and upcoming US economic data for further direction in precious metal markets.
–With Reuters inputs
