Spot gold prices fell 0.3% to $4,066 an ounce as geopolitical tensions in West Asia boosted the US dollar. Investors are now focused on upcoming US Federal Reserve meeting minutes and jobless claims data to gauge the future interest rate path.
Gold prices moved lower in early trading on Thursday, with spot gold slipping 0.3% to trade around $4,066 per ounce. This follows a trend where the precious metal touched a one-week low in the previous session, reflecting a cautious mood among global investors. US gold futures for August delivery also saw a minor decline, falling 0.1% to approximately $4,077 per ounce.
The recent downward pressure on gold is largely tied to a strengthening US dollar. Escalating tensions in the US-Iran conflict have prompted a shift in market sentiment. Following military strikes, oil prices have spiked, which has simultaneously pushed the dollar higher and heightened worries about persistent inflation. Because gold does not earn interest, a stronger dollar and expectations of higher interest rates often make the metal less attractive to investors compared to interest-bearing assets like Treasury bonds.
Looking ahead, investors are tracking the release of the US Federal Reserve’s June policy meeting minutes and the latest weekly jobless claims data. These releases are expected to offer more clarity on the US central bank's stance regarding future interest rate hikes. Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions, indicated that the rise in the dollar and Treasury yields is currently weighing on bullion prices. While gold has seen a significant rally recently, the current environment suggests a potential short-term correction before any resumption of a broader upward trend.
Additional pressure is coming from the macroeconomic front. The International Monetary Fund has lowered its 2026 global growth forecast to 3%. Furthermore, Bank of America has reduced its average gold price forecast for 2026 by 14%, citing the likelihood of a more aggressive or 'hawkish' monetary policy from the US Federal Reserve.
While gold faces global headwinds, silver has demonstrated relatively more resilience. In the Indian market, specific domestic factors are playing a role in price dynamics. Recent import restrictions have tightened the supply of silver within the country, leading to higher premiums. These domestic supply constraints serve as a key monitorable for those tracking precious metals in India, as they often create a decoupling effect from international price movements. Investors will likely watch both the incoming US economic data and domestic supply conditions to determine the next major move for bullion prices.