Gold slips for a second session on Wednesday as hopes dimmed for a quick end to the U.S.-Iran conflict. Investors also watch news on whether the U.S. and Iran are close to a truce and what the Federal Reserve intends to do regarding future monetary policy.
New clashes between the U.S. and Iran on Tuesday stymied statements about an imminent truce, and that increased speculation that inflation could keep interest rates higher for some time. Before the renewed hostilities, both the U.S. and Iran had made hopeful signs about a possible future peace deal.
Iran’s Islamic Revolutionary Guard Corps warned Tuesday that it would retaliate against any ceasefire violations after the U.S. targeted Iranian missile launch sites and boats around the Strait of Hormuz, the key oil artery. Gold has largely fallen on signals that the war may be extended because of the threat of prolonged inflation. The war has erased expectations that the Fed will cut interest rates this year. High interest rates are typically considered bearish for precious metals.
August gold futures fell 0.5% Tuesday to settle at $4,535.00 an ounce on Comex. U.S. financial markets were closed Monday for the Memorial Day holiday, and electronic trading on Comex that day posted for Tuesday’s settlement. The most-active contract, which rolled from June last week, fell 0.1% in the week ended May 22. Bullion is down 2% so far this month after dropping 1% in April and sliding 11% in March. It rallied 64% last year. The August contract is currently down $87.90 (-1.94%) an ounce to $4447.10 and the DG spot price is $4434.00.
The U.S. and Iran have indicated that they’re working toward a memorandum of understanding to halt the conflict but are arguing over language. U.S. Secretary of State Marco Rubio indicated any deal would take a few days to finalize.
The Fed is now being led by Chair Kevin Warsh, a Trump nominee sworn in late last week. Trump has long called for lower interest rates, but rising inflation may get in the way of that.
The Fed last month held interest rates steady at 3.5% to 3.75%, as expected, but policymakers were unusually divided.
Almost all the investors tracked by the CME FedWatch Tool are betting on rates staying unchanged again in June. The Fed has kept interest rates unchanged this year after three previous rate cuts. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts in 2024.
Front-month silver futures rose 0.5% Tuesday to settle at $76.61 an ounce on Comex. The July contract tumbled 1.7% last week. The most-active contract touched a record above $115 in January. Silver is up 3.5% this month after losing 1.2% in April and dropping 20% in March. It rose 141% last year. The July contract is currently down $2.186 (-2.85%) an ounce to $74.420 and the DG spot price is $74.76.
Spot palladium gained 1.4% Tuesday to $1,385.50 an ounce. It lost 4.2% last week. Palladium is down 10% this month after rising 3.2% in April and tumbling 17% in March. Palladium rose 74% last year. The DG spot price is currently up $5.20 an ounce to $1395.50.
Spot platinum increased 0.6% Tuesday to $1,951.60 an ounce. It declined 2.7% last week. It is down 2.1% so far this month after gaining 1.3% in April and declining 17% in March. Platinum increased 122% in 2025. The current DG spot price is down $33.30 an ounce to $1920.30.
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