Gold Slides to Week-Long Low Amid Middle East Tensions and Inflation Fears

Spot gold fell 0.9% to $4,697.06 per ounce by 03:05 p.m. EDT, marking its lowest level since April 13 and a decline of more than 1% earlier in the session to $4,663.69. U.S. June gold futures closed 0.6% lower at $4,724, reflecting growing anxiety that the fallout from the Middle East conflict could keep rates elevated for an extended period.

Independent metals trader Tai Wong warned that the ongoing standoff between the United States and Iran resembles a grim game of Battleship, heightening the risk of a ceasefire collapse. He noted that the surge in crude prices, now above $100 a barrel for Brent, is pulling down other assets, including gold, which had briefly approached $4,900 last Friday.

Iran showcased its control over the Strait of Hormuz with footage of commandos boarding a large cargo vessel, after peace talks collapsed. Higher oil prices tend to fuel inflation, prompting expectations of further interest‑rate hikes. Although gold is traditionally an inflation hedge, rising rates diminish its appeal. A Reuters poll suggests the Federal Reserve will likely wait at least six months before any rate cuts this year. Meanwhile, a firmer dollar and 10‑year Treasury yields at a one‑week high increased the opportunity cost of holding non‑yielding bullion. Silver dropped 2.7% to $75.55 per ounce, platinum fell 3.2% to $2,008.22, and palladium slid 5% to $1,465.23, all reaching week‑long lows.