Gold prices have crashed to trade around $4,180 per ounce, marking the lowest level since December 8, 2025, as escalating tensions between the United States and Iran following military exchanges near the Strait of Hormuz create fresh downside pressure. According to Goodreturns, the latest crash was triggered by President Donald Trump warning Israel to stop attacking the Islamic Regime, followed by the US launching new strikes called 'self-defence strikes' against Iran, right after Israel and Iran agreed to halt attacks on each other. The renewed conflict has heightened concerns about prolonged disruptions to global energy supplies and driven a fresh surge in crude oil prices, with Brent crude pushing above $93 per barrel as analysts warn any further military escalation could drive oil prices into the mid-$90s or higher. The selloffs in precious metals, which should have found support in the latest Middle East crisis, are now trapped in a conundrum, as reported by Trading Economics. Comex gold was trading flat at $4,075 per ounce on Thursday evening, as reported by The Economic Times.
Silver prices have crashed over 2% to trade around $63.84 per ounce, marking the lowest level since December 8, 2025, as the precious metal faces mounting pressure from both geopolitical tensions and technical breakdown. According to Goodreturns, silver has erased the $64 mark, giving up the critical support level that had previously provided some stability. The precious metal is expected to find support at $62.64, followed by $61.79 and $59.02, with resistance levels placed at $65.41, $66.26 and $69.03. On MCX, Silver July futures have support at ₹2,30,191, ₹2,28,009 and ₹2,20,947, while resistance is seen at ₹2,37,253, ₹2,39,435 and ₹2,46,497. A break below the final support level could see silver trade below the $60 mark, representing a significant technical breakdown for the white metal. Silver futures on Comex turned positive after recovering nearly $2 per troy ounce to $65.46, though so far this week, silver has declined 5.25% while gold has lost 4%. Silver was trading at $63.5 per ounce, up 1% over the previous trading session, as reported by The Economic Times.
Global brokerage Citigroup has lowered its near-term target for COMEX gold to $4,000 per ounce from an earlier $4,300, citing limited catalysts for a sustained move higher in the yellow metal. In a note, Citigroup highlighted that stabilizing real yields, stronger short-term dollar bias, easing geopolitical tensions and decline in safe-haven premiums will play a role in defining sentiments in spot gold. The brokerage noted the moderation in physical gold demand from central banks and ETF inflows as key factors influencing the outlook. Unless there are fresh shocks, Citigroup sees upside catalysts to be capped in the near term, though the firm maintains its 6-12 months target of $4,500 per ounce on gold. Citigroup believes that gold could move higher $4,000 if inflation reignites or economies weaken further, providing some optimism for longer-term prospects despite near-term challenges.
The US Consumer Price Index excluding food and energy items rose 0.2% month-on-month in May, following a 0.4% increase in April, which was lower than economists polled by Reuters had expected who had expected core CPI to rise 0.3%. The headline annual inflation rate, which includes all categories, climbed above 4% for the first time in three years, reaching 4.2% in May, compared with 3.8% in April and marking the third consecutive monthly increase. On a monthly basis, prices rose 0.5% in May, following increases of 0.6% in April and 0.9% in March. This softer inflation data provided some relief to precious metals markets, though gains remained capped by escalating Middle East tensions and a strong US dollar. The US 2-year Treasury yield was at 4.131%, up 0.1 percentage point, creating additional challenges for precious metals, as reported by The Economic Times.
Traders are currently pricing in about a 67% chance of a US interest rate hike in December, according to CME Group's FedWatch tool, with expectations of a US Federal Reserve rate hike in 2026 remaining elevated. The dollar index was trading at 99.8 during the session, keeping precious metals under pressure. The US 2-year Treasury yields, a key proxy for Fed rate expectations, have climbed to their highest levels since February 2025, creating challenges for gold and silver, which are seen as anti-dollar trades. Higher interest rates tend to weigh on the non-yielding metal gold, despite gold being traditionally viewed as a hedge against inflation. The release of the US Producer Price Index (PPI) data on Thursday will provide investors with further clues regarding the Federal Reserve's monetary policy outlook. Market focus has now shifted to the upcoming US inflation data due on Wednesday, which will be crucial in shaping expectations around future Federal Reserve policy, said Jateen Trivedi, VP Research Analyst at LKP Securities.
