Gold Prices Decline Amid Weighing of Lower Rate-Cut Expectations

Gold Prices Slip Amid Inflation Concerns and Middle East Conflict

Gold prices declined in early trading, reaching $5,160.82 per ounce, following the release of US inflation data that reduced the likelihood of a Federal Reserve interest rate cut. The US inflation rate, although tame at the start of the year, has raised forward-looking inflationary concerns, weighing on bullion prices.

The ongoing US-Israeli war with Iran, now in its 13th day, has disrupted oil production and refining in the Middle East, leading to a rise in crude oil prices for a second consecutive day. The conflict has also led to concerns over a prolonged conflict, outweighing the emergency release of reserves by wealthy nations. In response, President Donald Trump has indicated that he would tap the US Strategic Petroleum Reserve to ease prices.

Gold, a source of liquidity for investors to shore up their portfolios, has seen a decline in the volume of gold held by exchange-traded funds since the war broke out. However, inflows were recorded on Tuesday after holdings fell last week by the most in over two years. Despite this, gold has still advanced around 20% this year, gaining support from its role as a haven in times of geopolitical upheaval.

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Precious metals prices as of 6:39 a.m. in Singapore are as follows:

• Spot gold: $5,160.82 per ounce, down 0.3%
• Silver: $85.09 per ounce, down 0.8%
• Platinum and palladium traded lower
• Bloomberg Dollar Spot Index: up 0.1% after ending the previous session up 0.2%