Gold Prices Continue Downward Trend for Tenth Consecutive Session Amid Ongoing Iran Conflict Concerns

Global Gold Prices Decline Amid War Uncertainty

Gold prices fell as investors weighed conflicting statements on the war in the Middle East, with a postponement of US strikes on Iran's energy infrastructure bringing only brief respite from the precious metal's dramatic wartime decline.

In a volatile session, bullion lost as much as 1.8%, having earlier climbed nearly 1%. The price movement largely tracked equities and an inverse relationship with oil. US President Donald Trump announced a five-day delay to attacks he had threatened on Iranian power plants, citing "productive discussions." However, an Iranian official ruled out talks, and the Wall Street Journal reported that US partners in the Persian Gulf could join the fight.

High energy prices resulting from the conflict have raised the risk of inflation and prompted investors to ditch their relatively liquid and profitable positions in gold for other assets. The metal dropped nearly 2% in the previous session for its ninth straight daily drop – a 10th would signal the longest losing streak in history.

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Despite the pause announced by Trump, the outcome of any negotiations and future passage of ships through the Strait of Hormuz remain uncertain. Even existing damage to energy infrastructure will take time to rebuild, maintaining the threat of inflation and the expectation of rate hikes by the US Federal Reserve and other central banks – a headwind for non-yielding precious metals.

Gold's price correction has seen a steeper-than-usual underperformance, according to Suki Cooper, global head of commodities research at Standard Chartered Plc. A similar dynamic followed the Russian invasion of Ukraine in early 2022, when an initial spike in the safe-haven commodity was followed by a months-long decline.

Spot gold fell 1.5% to $4,340.80 an ounce at 9:16 a.m. in Singapore. Silver slid 3.3% to $66.81, while platinum and palladium also declined. The Bloomberg Dollar Spot Index, a gauge of the US currency, rose 0.2% after ending the previous session 0.4% lower.