Gold and Silver Prices Fall Amid Weakened Sentiment over Iran Conflict

Gold Prices Plunge to 7th Consecutive Loss as War in Middle East Escalates Inflation Risks

The price of gold has declined for a seventh session, with the precious metal experiencing its longest losing streak since 2023. This downward trend is attributed to the ongoing war in the Middle East, which has driven up oil prices and reduced the likelihood of a US interest-rate cut in the near term.

As a result, gold prices have slid as much as 6%, with spot gold trading at $4,564.16 per ounce as of 12:54 p.m. in London. The decline in gold prices is also reflected in the performance of gold-backed exchange-traded funds (ETFs), which have seen persistent outflows in recent weeks, weighing on prices.

The escalation of the war in the Middle East has also had a significant impact on silver prices, which have declined by over 10% to $67.21. The volatility in precious metals has raised concerns among investors, with some seeking to sell the metal to meet margin calls elsewhere in their portfolios.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The Federal Reserve's decision to hold interest rates steady and project just one cut this year has further contributed to the decline in gold prices. The metal's performance since the war broke out mirrors its decline through the summer of 2022, when Russia's invasion of Ukraine caused an energy price shock that rippled through global markets.

Although gold is still up almost 6% so far this year, the upward momentum has stalled in recent weeks as prospects for a near-term rate cut have faded. This has led some investors to view gold as a speculative asset rather than a safe haven.