Precious Metals Slide as Crude Oil Rally Fuels Inflation Worries

Thursday brought significant corrections in gold and silver as investors reacted to escalating tensions between Washington and Tehran alongside a robust rebound in crude prices. International spot gold dropped 1.74 percent reaching 4,379 dollars an ounce while Comex June contracts lost 1.62 percent to close at 4,376 dollars. Silver fared worse with spot values declining 2.22 percent to 72.92 dollars per ounce and July 2026 futures shedding 2.62 percent. The trigger was renewed U.S. military action against Iranian targets which rattled global risk appetite. Rising oil prices have reignited worries about imported inflation prompting traders to scale back bets on imminent monetary easing by the Federal Reserve and other major banks. Gold now sits more than 15 percent lower than levels seen when the latest conflict cycle began. At the same time crude benchmarks surged more than three percent after reports that Iran’s Revolutionary Guards struck back at an American airbase. The combination of higher energy costs a firmer greenback and lingering diplomatic uncertainty is expected to sustain choppiness in bullion markets. Traders say the near-term direction will hinge on any breakthrough or breakdown in U.S.-Iran talks over nuclear issues and strategic waterways.