Gold prices experienced a reversal on Thursday, declining by over 1% and ending a four-day upward trend. This shift occurred after U.S. President Donald Trump announced that military actions in Iran would continue in the coming weeks.
As of 0202 GMT, spot gold was priced at $4,694.48 per ounce, marking a 1.3% decrease, while U.S. gold futures fell 1.9% to $4,723.70. Prior to Trump’s comments, gold prices had risen by more than 1%, reaching their highest levels since March 19.
During a televised address, Trump stated that the U.S. would respond “extremely hard” to Iran over the next two to three weeks, indicating that the nation was close to achieving its strategic goals in the ongoing conflict.
Independent metals trader Tai Wong commented on the situation, noting, “Gold is pulling back after two superb days, as President Trump was quite bellicose in his tone, referring to aggressive plans over the coming weeks… it suggests the optimism of the last few days was overexuberant and there will be some retracement ahead of the long weekend.”
In addition to the decline in gold, Brent oil prices surged by more than 4%, alongside an increase in the U.S. 10-year Treasury yield and a rise in the dollar index, which collectively placed downward pressure on gold, typically priced in dollars.
In March, gold experienced an 11% drop—the largest monthly decline since 2008—following the escalation of the conflict in Iran on February 28. This situation has contributed to rising oil prices and inflationary pressures, complicating the Federal Reserve’s monetary policy decisions.
Market expectations for a rate cut by the Federal Reserve remain low through most of 2026, with traders anticipating little change until a modest 25% chance of a cut arises during the December meeting.
While gold is often seen as a safe haven during inflationary periods and geopolitical unrest, higher interest rates can diminish its appeal by increasing the opportunity cost associated with holding non-yielding assets.
St. Louis Federal Reserve President Alberto Musalem indicated on Wednesday that the central bank does not need to alter its interest rate policy at this time, even with the rising risks of inflation.
Other precious metals also saw declines, with spot silver falling 2.9% to $72.95, platinum decreasing by 1.8% to $1,928.26, and palladium dropping 1.4% to $1,451.85.
