Gold prices fell from a two-week high on Thursday after US President Donald Trump said Washington would continue its military campaign in Iran in the coming weeks, pushing crude oil prices up sharply and weakening interest rate cut expectations.
Spot gold prices fell 2% to $4,623.68/ounce at 2:17 PM Vietnam time, ending a four-session winning streak, while US gold futures fell 2.5% to $4,691.10/ounce.
The adjustment took place after gold prices previously climbed to their highest level since March 19, before Mr. Trump made new statements.
In a prime-time address late Wednesday evening, Mr. Trump said the US would launch strong attacks on Iran in the next two to three weeks and the military campaign is approaching "the completion of key strategic goals".
Mr. Tai Wong - Independent metal trader, said that gold prices are adjusting after two strong sessions of increase, as Mr. Trump's tough tone about the plan to attack in the near future shows that the market's optimism in recent days has been somewhat excessive and there may be a correction before the long holiday.
The market reacted quickly when 10-year US Treasury bond yields and the USD index simultaneously increased, putting pressure on gold prices valued in greenbacks.
Meanwhile, Brent oil prices rose more than 6% after Mr. Trump signaled that he would continue to target Iran's energy infrastructure, increasing concerns about supply.
Gold prices had previously been under pressure when they fell 11% in March, the strongest monthly decrease since the global financial crisis in 2008, after the conflict with Iran broke out on February 28. The upward momentum of oil prices has raised concerns about inflation, making the monetary policy outlook of the US Federal Reserve (Fed) more complicated.
Expectations for US interest rate cuts remain low for most of 2026, as the possibility of interest rate cuts in December is only about 12%, down from about 25% before Mr. Trump's latest statements.
Although gold often benefits in the context of rising inflation and geopolitical tensions, high interest rates reduce the attractiveness of this non-interest-generating asset due to increased opportunity cost holdings.
In other metals, spot silver prices fell 4.6% to 71.67 USD/ounce, platinum fell 2.5% to 1,914.61 USD and palladium fell 1.4% to 1,451.92 USD/ounce.
