Singapore, May 29: Gold prices fell to a two-month low on Thursday as fresh US attacks on Iran boosted the dollar and pushed oil prices higher, stoking concerns about rising inflation and clouding the interest rate outlook.
Spot gold was down 1.7 percent at $4,380.62 per ounce, as of 0409 GMT, earlier falling to its lowest level since March 26. US gold futures for June delivery fell 1.6 percent to $4,377.10.
The dollar rose to a one-week high, making greenback-priced bullion more expensive for holders of other currencies.
"Geopolitical tensions remain high, and we've had too many false alarms from the peace deal talks. So I think the US dollar is going to remain bid, and that means gold is likely to remain under pressure," said Matt Simpson, a senior analyst at StoneX.
The US military carried out new strikes in Iran targeting a military site that officials believed posed a threat to US forces and commercial shipping in the Strait of Hormuz, a US official said, hours after President Donald Trump dismissed an Iranian report of a deal to restore traffic through the strategic waterway.
Oil prices jumped more than 3 percent on Thursday after Iran's Revolutionary Guards said they targeted a US airbase in response to the US attack.
Elevated crude prices can accelerate inflation and keep interest rates higher for longer. While gold is seen as a hedge against inflation, higher rates tend to weigh on the non-yielding metal.
Investors await the release of US Personal Consumption Expenditures data, due later in the day, for clues on the Fed's monetary policy path.
Spot silver fell 3 percent to $72.37 per ounce and platinum lost 1.4 percent to $1,890.81, both hitting a near one-month low. Palladium slid 1.9 percent to $1,364.26.
Source: Qatar Tribune
