Gold falls as US-Iran tensions lift oil prices

Other precious metals, including silver, platinum, and palladium, also fell.

Gold prices fell today, May 26, after fresh US attacks in Iran pushed oil prices higher. This fueled concerns over inflation and interest rates staying higher for longer.

Spot gold fell 0.7% to $4,537.54 per ounce by 0218 GMT, while US gold futures for June delivery rose 0.3% to $4,538.50.

A well-informed official said on Monday that Iran’s chief negotiator and foreign minister visited Doha for talks with Qatar’s prime minister on a possible agreement with US to end the three-month war, after Washington and Tehran played down hopes of an imminent breakthrough.

Despite the ongoing talks, US forces on Monday carried out attacks in southern Iran targeting boats attempting to plant mines and missile launch sites, in what were described as defensive operations.

“Although we have a US-Iran peace agreement in final stages, the damage to oil production facilities in the Middle East could effectively prevent oil flows from returning quickly to normal levels from the Middle East to the rest of the world,” said Kelvin Wong, Senior Market Analyst at OANDA.

“The market has started to price in this situation, with very high odds of interest rate hikes this year,” he added.

Brent crude futures rose 2% in early Asian trading today, as US-Iran tensions persisted.

Among other precious metals, spot silver fell 1.8% to $76.66 per ounce, platinum lost 0.9% to $1,950.70, and palladium declined 1.1% to $1,382.42.