Gold falls as markets assess US monetary policy outlook

Gold bars

Gold prices ended Wednesday lower as markets assessed the Middle East conflict and its potential implications for central banks’ monetary policies.

Gold futures for June delivery fell 0.54%, or $26.50, to $4,823.60 per ounce.

Spot silver declined 0.41% to $79.1998 per ounce as of 09:40 p.m. Makkah time.

This came as the US dollar index held steady amid the continued closure of the Strait of Hormuz, despite US President Donald Trump signaling the possibility of reaching a peace deal with Iran this month.

Safe-haven assets also came under pressure as investors awaited the Federal Reserve’s Beige Book report released today, which showed uncertainty in companies’ plans regarding hiring, pricing, and capital investment due to the impact of the war with Iran.

As signs of a potential end to the conflict emerge, investors now see a 32% probability of a Fed rate cut this year, increasing the opportunity cost of holding non-yielding assets such as gold.