Gold prices fell on Thursday, weighed down by a firmer US dollar and waning hopes for near‑term US interest‑rate cuts as higher energy prices stoked inflation concerns.
Spot gold was down 0.4 per cent at $5,153.79 per ounce as of 0545 GMT. US gold futures for April delivery fell 0.4 per cent to $5,159.20.
The US dollar firmed 0.2 per cent, making dollar-priced bullion more expensive for holders of other currencies.
“I think the USD strength and interrelated rates story is a slight headwind for gold despite the actual violence that’s taking place, which is otherwise supportive of gold,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
Iran said the world should brace for $200-a-barrel oil after its forces struck merchant ships on Wednesday, while the International Energy Agency urged a massive release of strategic reserves to blunt one of the worst oil shocks since the 1970s.
Oil prices rose over $100 a barrel, adding to inflation pressures, as Iran stepped up attacks on oil and transport facilities across the Middle East.
Iran has deployed about a dozen mines in the strait, according to sources, a move that could complicate efforts to reopen the narrow waterway, a key route for global oil and liquefied natural gas shipments.
Tankers in the strait have been stranded for more than a week, and producers have suspended output as storage nears capacity.
Goldman Sachs has delayed its forecast for US Federal Reserve rate cuts, and now expects quarter-point reductions in September and December, citing rising inflation risks linked to the Middle East conflict.
In economic data, the US consumer price index rose 0.3 per cent in February, matching forecasts and accelerating from January’s 0.2 per cent increase. CPI rose 2.4 per cent in the year to February, also in line with expectations.
Investors are now awaiting the release of January’s delayed Personal Consumption Expenditures index on Friday.
Spot silver fell 0
5 per cent to $85.33 per ounce. Spot platinum lost 0.3 per cent to $2,162.24, while palladium rose 0.3 per cent to $1,642.05.
