Gold prices moved lower on Wednesday as escalating tensions in the Middle East pushed oil prices higher, reinforcing concerns that inflationary pressures could remain elevated and delay potential interest-rate cuts from major central banks.
By 05:42 ET (09:42 GMT), spot gold had fallen 1.0% to $4,444.86 per ounce, while U.S. gold futures were also down 1.0% at $4,475.62 per ounce
Renewed Conflict Clouds Prospects for U.S.-Iran Agreement Investors continued to monitor developments in the Middle East after reports of fresh military exchanges between the United States and Iran. According to Reuters, the U.S. military said Iranian attacks targeting Kuwait, Bahrain and other locations were either intercepted or unsuccessful. At the same time, Iranian state media reported that the Islamic Revolutionary Guard Corps had targeted the headquarters of the U.S.
Fifth Fleet in Bahrain in response to a U.S. strike on a communications facility located south of Qeshm. The latest escalation has weakened expectations that Washington and Tehran are nearing an agreement to end a conflict that has now lasted for more than three months, despite U.S. President Donald Trump maintaining that discussions between the two countries continue. “[T]he market remained cautiously watchful regarding U.S.-Iran negotiations,” said Neil Walsh, Head of Metals at Britannia Global Markets, in a note.