A gold bar weighing 1000 grams is on display at the Austrian Gold and Silver Refinery (Oegussa) on February 3, 2026 in Vienna, Austria.
Georg Hochmut | AFP | Getty Images
Gold pared losses on Thursday following the release of US inflation data for April, but prices fell for a third straight day as skepticism about the US-Iran deal clouded the interest rate outlook.
Spot gold fell 0.6% to $4,428.69 an ounce after falling to its lowest since late March in early trade. US gold futures fell 0.5% to $4,426.20.
Data showed the U.S. consumer spending price index rose 3.8% in the 12 months to April, in line with expectations. The PCE price index rose 0.4% month-on-month in April, after rising 0.7% in March.
Bart Melek, global head of commodity strategy at TD Securities, said the statistics provide some respite for gold and suggest the Federal Reserve may choose to keep interest rates where they are rather than pursue tighter policy.
He added that even if the war were to stop now, gold could continue to fall significantly as energy prices could remain high.
Minutes of the April 28-29 Fed board meeting released last week showed that more officials are accepting that they may need to raise interest rates.
Despite its appeal as a safe-haven asset, bullion underperforms as interest rates rise as investors gravitate toward higher-yielding assets.
“The problem for gold is that geopolitical instability is no longer operating in a vacuum,” said Fawad Razaqzada, market analyst at City Index. “Soaring energy prices are once again fueling inflation concerns, pushing Treasury yields slightly higher and at the same time pushing the dollar higher.”
In geopolitics, the United States attacked what it called an Iranian drone operation near the Strait of Hormuz, and Iran targeted a U.S. air base after President Donald Trump rejected a reported compromise deal with Iran.
Spot silver fell 1.2% to $73.69 an ounce, and platinum fell 1.6% to $1,887.75. Palladium fell 3.1% to $1,347.31.
