Gold prices fell to their lowest level in over six months, driven by concerns about inflation and the prospect of prolonged high interest rates, according to Reuters.
The spot price of gold dropped by 0.2% to $4,063.87 per ounce, after earlier falling to its lowest level since 21 November. For August delivery, US gold futures decreased by 1.1% to $4,086.50.
Silver continued to face downward pressure, with COMEX silver down 0.23% to $64.59 per ounce, and the spot price also declined by 0.9% to $63.15 per ounce.
Oil prices surged more than $2 per barrel after Iran announced the closure of the Strait of Hormuz, intensifying concerns about disruptions to global energy supplies and fuelling fears of higher inflation worldwide.
Although gold is traditionally viewed as a safe-haven asset during periods of geopolitical uncertainty, the sharp rise in crude oil prices has shifted investor attention toward inflation risks and the prospect of interest rates remaining elevated for longer. Higher interest rates typically reduce the attractiveness of non-yielding assets such as gold and silver.
Adding to market concerns, recent U.S. economic data showed consumer inflation accelerated in May, partly driven by higher energy costs linked to the escalating conflict in West Asia. Investors are now closely awaiting the release of the Producer Price Index (PPI) data for further clues on the Federal Reserve’s future policy trajectory.
The weakness in global bullion markets also spilt over into domestic trade. In India, MCX gold futures declined nearly 2% in the previous session, slipping below the ₹1.5 lakh per 10 grams mark after touching record highs of around ₹1.55 lakh– ₹1.56 lakh per 10 grams earlier this month.
