Gold prices experienced a decline of up to 1.2% during early Asian trading, influenced by a broad selloff in global equities that overshadowed concerns about escalating tensions in the Middle East. The price of spot gold, which had surged near record levels the previous week, fell to approximately $2,425 per ounce as Asian markets opened to a downturn. The decline in gold prices came as fears of a severe slowdown in the U.S. economy weighed heavily on investor sentiment, with apprehensions that the Federal Reserve might be lagging in its response to the need for interest rate adjustments.
Despite heightened fears of potential conflict between Israel and Iran, which have stirred concerns of retaliatory actions and military engagement, the gold market was dragged down by the broader selloff in risk assets. Israel is reportedly bracing for possible retaliation from Iran and its allied militias following recent targeted assassinations of Hezbollah and Hamas officials.
Gold remains one of the top-performing commodities this year, bolstered by central bank purchases, strong demand from Asian consumers, and expectations that the Fed might soon implement rate cuts. Typically, gold benefits from increased safe-haven demand during periods of financial and geopolitical instability; however, it can still experience declines when market selloffs are sharp and broad-based.
As of 9:05 a.m. in Singapore, gold for immediate delivery had dropped by 0.7% to $2,426.19 per ounce, even with a retreat in 10-year Treasury yields. The metal had risen more than 2% the previous week, reaching above $2,477, and approaching its all-time high.
In other metal markets, silver fell by over 1% to near $28 per ounce, palladium was poised for its lowest close since February, and platinum also saw a decrease.
