Gold Falls 1.7 Percent Silver Drops More Amid Oil Geopolitics

Precious metals came under heavy selling pressure Thursday after fresh U.S. strikes on Iran triggered a fresh wave of risk aversion and pushed crude prices sharply higher. Spot gold declined 1.74 percent to 4,379 dollars an ounce while June futures eased 1.62 percent to 4,376 dollars. Silver posted larger losses with spot prices slipping 2.22 percent to 72.92 dollars per ounce. Market sources attributed the move to mounting inflation concerns sparked by the oil rally which has reduced the odds of near-term rate cuts. Gold is now trading more than 15 percent below its earlier highs as expectations of prolonged higher borrowing costs persist. Crude oil futures jumped over three percent following claims by Iran’s Revolutionary Guards that they had targeted a U.S. military installation. The renewed flare-up has once again placed the Strait of Hormuz and Iran’s nuclear program at the center of diplomatic tensions with Washington. Analysts caution that the combination of geopolitical uncertainty elevated energy prices and dollar strength will likely keep gold and silver on a volatile path. Indian markets remained closed for Eid holidays leaving local traders to watch international cues closely.