Gold prices retreated by more than 1% on Thursday, ending a four-day rally after US President Donald Trump indicated that the United States would continue its military campaign in Iran in the coming weeks.
Spot gold declined 1.3% to $4,694.48 per ounce by 0202 GMT, while US gold futures dropped 1.9% to $4,723.70.
Earlier in the session, prices had risen over 1% to their highest levels since March 19 before reversing following Trump’s remarks.
In a televised address, Trump said the United States would strike Iran “extremely hard” over the next two to three weeks and push it back into the “Stone Ages,” adding that US strategic objectives in the conflict were nearing completion.
“Gold is pulling back after two superb days, as President Trump was quite bellicose in his tone, referring to aggressive plans over the coming weeks… it suggests the optimism of the last few days was overexuberant and there will be some retracement ahead of the long weekend,” said independent metals trader Tai Wong.
Meanwhile, Brent crude prices surged by more than 4%, and both the 10-year US Treasury yield and the dollar index moved higher, putting pressure on gold, which is priced in dollars.
Gold had already dropped 11% in March—its steepest monthly decline since 2008—following the outbreak of the Iran conflict on February 28, which pushed oil prices higher and intensified inflation concerns, complicating the Federal Reserve’s monetary policy outlook.
Expectations for a Fed rate cut remain limited through most of 2026, with markets largely anticipating no change until a modest 25% probability of a cut appears for the December meeting.
Although gold is typically seen as a hedge against inflation and geopolitical uncertainty, higher interest rates reduce its appeal by raising the opportunity cost of holding a non-yielding asset.
St. Louis Federal Reserve President Alberto Musalem said on Wednesday that there is no immediate need for the US central bank to adjust interest rates amid rising inflation risks.
In other precious metals, spot silver fell 2.9% to $72.95, platinum declined 1.8% to $1,928.26, and palladium dropped 1.4% to $1,451.85.
