Gold prices slips after Fed’s hawkish pause; Iran tensions support

Investing.com--Gold prices slipped lower Thursday as the Federal Reserve’s hawkish stance strengthened the dollar and pressured bullion, while rising geopolitical risks from potential U.S. involvement in the Israel-Iran conflict capped losses.

At 09:00 ET (13:00 GMT), Spot Gold fell 0.1% to $3,368.15 an ounce, while Gold Futures for August declined 0.7% to $3,384.20/oz. 

Fed’s hawkish pause hits gold

Gold prices have fallen back to a one-week low, heading for a second consecutive losing day, after the U.S. Federal Reserve held interest rates steady on Wednesday, for the fourth meeting in a row, and said it won’t rush into policy easing as the policymakers focus on the potential inflationary pressures from U.S. tariffs.

This relatively hawkish stance helped the dollar higher, making commodities denominated in the U.S. currency, like gold, relatively more expensive for foreign buyers

Lower interest rates also bode well for gold prices as they reduce the opportunity cost of holding non-yielding assets like bullion.

Gold supported by risk-off sentiment

That said, gold prices remain over 28% higher this year to date, supported by the global risk-off sentiment on the back of U.S. President Donald Trump’s chaotic trade policies, the continued war in Ukraine and the recent conflict in the Middle East.

Senior U.S. officials are preparing for a potential strike on Iran in the coming days, Bloomberg reported on Wednesday, citing people familiar with the matter.

While plans remain fluid, some officials pointed to the weekend as a possible window for action, the report said.

This comes after Iran’s Supreme Leader, Ayatollah Ali Khamenei, rejected President Trump’s demands for unconditional surrender, and said that neither peace nor war could be imposed on the Islamic Republic.

President Trump said on Wednesday he may or may not strike Iran.

Platinum falls back from 10-yr high 

Platinum Futures fell 3.2% to $1,271.75/oz after rising to their highest level since September 2014.

 A bullish industry report in late May sparked strong buying, as demand from Chinese jewelry makers and industrial users remains strong, while low inventories and high lease rates are constraining supply.

The metal is increasingly viewed as an attractive alternative to gold amid shifting investor sentiment.

Broader metal prices were lower, as the greenback strengthened after the U.S. central bank’s rate decision.

Silver Futures dropped 1.6% to $36.315 per ounce.

Benchmark Copper Futures on the London Metal Exchange fell 0.7% to $9,607.00 a ton, while U.S. Copper Futures dropped 1% to $4.8070 a pound.

Ayushman Ojha contributed to this article