Gold settles lower, enters bear market territory

Gold bars

Gold prices fell sharply on Wednesday, pushing the precious metal into bear market territory for the first time since 2022, amid expectations of higher US interest rates and persistent inflationary pressures stemming from the conflict in the Middle East.

Following the decline, gold has lost more than 20% from its record high reached 91 days ago, marking its fastest entry into a bear market since the peak of the global financial crisis in 2008, according to Dow Jones data.

US President Donald Trump said on Wednesday that Iran had taken too long in negotiations and "will pay the price," adding that the US would strike Iran "very hard" if a peace agreement is not reached.

Gold has come under pressure since the outbreak of the conflict in late February, as higher oil prices have fueled concerns over inflation and rising interest rates, reducing the appeal of the non-yielding precious metal.

US consumer inflation accelerated in May to its highest level in three years. Markets are currently pricing in roughly a 67% probability that the Federal Reserve will raise interest rates by December, data released Wednesday.