Gold prices edged lower on Thursday as rising United States Treasury yields and a stronger U.S. dollar weighed on the precious metal, even as escalating tensions in the Middle East continued to support safe-haven demand.
By 3:45 pm AEDT (4:45 am GMT), spot gold was trading 0.6% lower at US$5,144.60 per ounce, slipping below the $5,200 level as the metal struggled to find clear direction.
The decline came as the U.S. dollar strengthened amid heightened geopolitical risks following intensified attacks linked to the conflict involving Iran.
Tehran has stepped up strikes on tankers and vessels in Iraqi waters and near the strategically vital Strait of Hormuz, raising concerns about global energy supply routes and the potential for broader economic disruption.
Oil prices resumed their upward trajectory as fears of supply interruptions resurfaced, even after the United States and the International Energy Agency announced the release of emergency oil reserves aimed at stabilising markets.
The International Energy Agency agreed to release 400 million barrels of oil from member nations’ strategic reserves, with the United States contributing 172 million barrels from its Strategic Petroleum Reserve.
Despite the move, crude prices have continued to climb as markets remain focused on the risk that prolonged disruptions to shipping routes in the Persian Gulf could constrain global supply.
The surge in oil prices has also renewed concerns about inflation, pushing U.S. Treasury yields higher across the curve and strengthening the U.S. dollar.
Rising inflation expectations have reinforced market bets that the U.S. Federal Reserve could maintain a hawkish policy stance and keep interest rates elevated for longer.
Among data releases, U.S. consumer price index released on Wednesday was in line with forecasts, though the data did not capture the recent surge in oil prices.
As a result, investors expect that any inflationary effects linked to higher energy costs will only begin to appear in official data in the coming months.
