Gold Prices Fall for Third Straight Session Amid Inflation Worries

Gold prices declined for a third consecutive session on Wednesday, as concerns about inflation tied to the ongoing conflict in the Middle East clouded the outlook for monetary policy. The Federal Reserve's rate decision later in the day also drew attention.

Spot gold dropped 1% to $4,550.39 per ounce by 11:37 a.m. EDT (1537 GMT), after hitting a one-month low. U.S. gold futures fell 1% to $4,563.30. Analysts attribute the decline to positioning ahead of the Federal Reserve's decision, as well as rising U.S. Treasury yields and higher crude oil prices, which have fueled inflation worries.

Gold's appeal as an inflation hedge diminishes if central banks raise interest rates. The non-yielding metal's value is closely tied to monetary policy decisions. The ongoing conflict in the Middle East has contributed to the decline in gold prices, as well as concerns about supply disruptions that have driven up oil prices.

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Donald Trump Discusses Mitigating the Impact of a Possible U.S. Blockade of Iran's Ports

U.S. President Donald Trump has been discussing ways to minimize the effects of a possible months-long U.S. blockade of Iran's ports with U.S. oil companies. Tehran has warned of "unprecedented military action" against continued U.S. blockading.

The conflict has led to a surge in oil prices, with Brent hitting a one-month high amid concerns about supply disruptions. U.S. Treasury yields have also ticked higher. The Federal Reserve's policy decision is due at 2 p.m. EDT (1800 GMT), with expectations that rates will be held steady.

Federal Reserve's Policy Decision and Gold Prices

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Fed Chair Jerome Powell is scheduled to hold a press conference half an hour after the decision, which could be his final meeting as head of the Fed. Kevin Warsh, Trump's pick to lead the Fed, has cleared a key procedural hurdle.

Analysts expect today's meeting to be uneventful, with no rate changes anticipated. However, any surprises from Powell could be market-sensitive. The World Gold Council has reported that global gold demand rose 2% year-on-year in the first quarter of 2026, driven by a surge in purchases of gold bars and coins, as well as a 3% growth in buying by central banks. This growth outweighed a 23% decline in jewellery demand.

Metal Prices

The decline in gold prices was accompanied by a decline in other metals. Spot silver fell 1.8% to $71.75, platinum fell 2.8% to $1,886.53, and palladium eased 0.1% at $1,458.75.

Metal Price Comparison