Spot gold fell 0.7% to $4,182.44 an ounce by 02:18 ET (06:18 GMT), positioning the metal for a weekly decline of more than 3%. The drop comes after gold hit a six-month low on Thursday before rebounding sharply.<\/p>\n
U.S. Gold Futures for August delivery rose 2.2% to $4,203.87, supported by renewed optimism over a potential diplomatic breakthrough between Washington and Tehran. U.S. President Donald Trump said the two sides could sign a peace agreement as soon as this weekend, potentially reopening the Strait of Hormuz and easing concerns over global energy supplies. Iranian officials, however, stated that no final agreement had yet been reached, leaving the regional outlook uncertain.<\/p>\n
Gold, often viewed as a hedge against inflation and geopolitical risk, has faced headwinds as market focus has shifted toward the possibility of tighter U.S. monetary policy. Higher interest rates raise the opportunity cost of holding non-yielding bullion relative to interest-bearing assets.<\/p>\n
U.S. economic data released on Thursday reinforced concerns over elevated inflationary pressures. Producer prices rose more than expected in May, marking the largest annual increase in three-and-a-half years as higher energy costs filtered through the economy.<\/p>\n
The data prompted traders to increase bets that the Federal Reserve could resume policy tightening later this year, with markets pricing roughly a 60% chance of a rate increase by December. The U.S. Dollar Index traded largely flat in Asian hours after dipping 0.1% in volatile trading on Thursday.<\/p>\n
Broader market sentiment improved on hopes for a U.S.-Iran peace deal. Oil prices fell sharply following Trump\u2019s comments, while global equity markets rallied, contributing to reduced safe-haven demand for gold.<\/p>\n
Among other precious metals, spot silver declined 0.8% to $66.80 an ounce, while platinum gained 0.5% to $1,731.08 an ounce.<\/p>\n
In base metals, Benchmark Copper Futures on the London Metal Exchange advanced 1.6% to $13,706.33 a ton, and U.S. Copper Futures edged up 0.2% to $6.41 a pound.<\/p>\n
Why are gold prices falling despite geopolitical tensions?<\/strong> How did U.S. economic data affect expectations for Federal Reserve policy?<\/strong> How are other precious and base metals performing?<\/strong>
Gold prices are under pressure primarily due to persistent inflation concerns and increased expectations of a U.S. Federal Reserve interest rate hike, which raise the opportunity cost of holding non-yielding assets like bullion. Renewed hopes for a U.S.-Iran peace agreement have also improved risk sentiment, reducing safe-haven demand.<\/p>\n
Stronger-than-expected producer price data for May, showing the largest annual increase in three-and-a-half years, led traders to increase bets that the Federal Reserve could resume policy tightening later this year. Markets are pricing roughly a 60% chance of a rate increase by December.<\/p>\n
Spot silver fell 0.8% to $66.80 an ounce, while platinum rose 0.5% to $1,731.08 an ounce. Benchmark Copper Futures on the London Metal Exchange climbed 1.6% to $13,706.33 a ton, and U.S. Copper Futures gained 0.2% to $6.41 a pound.<\/p>\n