Spot gold was down 0.3% at around $4,066 an ounce in early Asian trade after touching a one-week low in the previous session. US gold futures for August delivery also slipped 0.1% to about $4,077 an ounce.
On the commodities exchange, COMEX gold futures were largely unchanged at around $4,083.20 per ounce, while COMEX silver futures traded at $58.60 per ounce, up 0.1%, indicating a relatively steady trend after recent volatility.
The decline in gold followed fresh escalation in the US-Iran conflict. The US military launched new strikes on Iran after US President Donald Trump said an interim agreement aimed at ending the conflict was no longer in effect. The developments pushed oil prices higher, strengthened the dollar and raised concerns that inflation could remain elevated.
Higher inflation expectations have also reinforced the possibility of tighter US monetary policy. Since gold does not earn interest, expectations of higher interest rates typically reduce its appeal compared with interest-bearing assets.
Market participants are also awaiting the release of minutes from the US Federal Reserve’s June policy meeting and weekly US jobless claims data for further clues on the interest rate outlook.
Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions, said bullion prices came under pressure after renewed US strikes on Iran boosted the dollar and Treasury yields. He added that both gold and silver had rallied sharply over the past week and could witness a short-term correction before resuming their broader upward trend.
The outlook for gold also remained under pressure after the International Monetary Fund lowered its global growth forecast for 2026 to 3%, while Bank of America cut its average gold price forecast for 2026 by 14%, citing expectations of a more hawkish US Federal Reserve.
Silver prices, meanwhile, remained comparatively resilient despite mild weakness in spot markets. In India, supply conditions continue to be closely watched after import restrictions led to tighter availability and higher domestic premiums in recent months.
-With Reuters inputs
