Gold prices reached a two-month low on Thursday, influenced by renewed US military actions against Iran, which bolstered the dollar and caused a rise in oil prices. This development heightened concerns over inflation and complicated the interest rate outlook.
As of 0409 GMT, spot gold had decreased by 1.7 percent to $4,380.62 per ounce, touching its lowest point since March 26. Meanwhile, US gold futures for June delivery fell by 1.6 percent to $4,377.10.
The dollar index rose to a one-week high, making gold—priced in US dollars—more expensive for international buyers. Matt Simpson, a senior analyst at StoneX, commented, “Geopolitical tensions remain high, and we’ve had too many false alarms from the peace deal talks. So I think the US dollar is going to remain bid, and that means gold is likely to remain under pressure.”
The US military carried out strikes on a military site in Iran, which officials indicated could pose a threat to US forces and commercial shipping in the Strait of Hormuz. This military action occurred shortly after President Donald Trump dismissed an Iranian report suggesting an agreement to restore traffic through the vital waterway.
Oil prices surged by over 3 percent on Thursday after Iran’s Revolutionary Guards announced that they targeted a US airbase in retaliation for the US strikes. Elevated crude prices can exacerbate inflation and sustain higher interest rates. While gold is viewed as a hedge against inflation, rising interest rates generally exert downward pressure on non-yielding assets like gold.
Federal Reserve Governor Lisa Cook expressed on Wednesday that the US central bank should maintain steady short-term interest rates for the time being. However, she noted that with rising tariffs, the conflict in Iran, and increasing AI-related investments driving prices up, she is ready to support rate increases if necessary.
Investors are anticipating the release of US Personal Consumption Expenditures data later in the day as an indicator of the Federal Reserve’s monetary policy direction.
In related markets, spot silver fell by 3 percent to $72.37 per ounce, while platinum declined by 1.4 percent to $1,890.81, both reaching near one-month lows. Palladium decreased by 1.9 percent to $1,364.26.
Published on May 28, 2026.
