Gold, silver prices decline as dollar steadies

Gold and silver prices fell as renewed US-Iran tensions fueled inflation concerns  

Gold prices declined on Thursday as renewed hostilities between the US and Iran pushed oil prices sharply higher, raising concerns over a resurgence in inflationary pressures and increasing the likelihood that central banks will keep interest rates elevated for longer.

Meanwhile, the US dollar index, which measures the greenback against a basket of six major currencies, was little changed at 100.94.

The pressure on precious metals followed fresh US military strikes against targets in Iran aimed at keeping the Strait of Hormuz open to international shipping, which were followed by Iranian strikes on US military sites, Reuters reported.

Analysts said the main driver behind gold's decline is investors repricing expectations for a second Federal Reserve interest rate hike as early as the first quarter of next year.

According to the CME FedWatch Tool, markets are currently pricing in a 68% probability of a rate hike in September and an 87% chance of another increase in January 2027.