(RTTNews) – Gold prices were sharply lower on Thursday after the U.S. conducted fresh self-defense strikes in southern Iran and Tehran also targeted strikes on a U.S. air base, driving up global oil prices and reviving inflation concerns.
Spot gold tumbled 1.4 percent to $4,395.53 an ounce while U.S. gold futures for August delivery were down 1.3 percent at $4,424.75.
Treasury yields edged higher, the dollar firmed to a one-week high and Brent crude prices jumped nearly 2 percent after the U.S. military shot down four Iranian drones and struck a control center in the southern port city of Bandar Abbas to prevent a fifth drone launch.
Iran’s Islamic Revolutionary Guard (IRGC) said that it targeted a U.S. airbase in Kuwait in response to the latest American aerial strike.
Earlier, U.S. President Donald Trump Indicated that negotiations with Iran were still facing major sticking points and warned Oman against attempting to influence control over the Strait of Hormuz.
Hours later, the U.S. Treasury sanctioned the Persian Gulf Strait Authority established to control the Strait of Hormuz, dealing a fresh blow to prospects for a negotiated settlement.
Meanwhile, after Iran’s state TV published what it purported to be a draft of an initial, unofficial framework for a memorandum of understanding between the U.S. and Iran, the While House adamantly denied its accuracy.
Hama’s armed wing confirmed that its military chief, Mohammed Odeh, was killed in an Israeli strike in Gaza, following months of intelligence tracking.
In economic releases, investors await the release of the Fed’s favorite inflation gauge, the core PCE price index, later in the day for fresh clues on the monetary policy path forward under new chair Kevin Warsh.
Amid elevated energy prices, analysts expect the PCE price index to have risen by an annual 3.8 percent in April, up from 3.5 percent in March and well above the long-run rate of 2 percent targeted by the U.S. central bank.
Fed Vice Chair Philip Jefferson said on Wednesday that inflationary risks are tilted to the upside and that the current setting of monetary policy is in the right place.
Separately, Fed governor Lisa Cook said she would be prepared to raise interest rates in response to rapidly rising prices.
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