Gold price (XAU/USD) tumbles to around $4,050, the lowest since November 2025, during the early Asian session on Thursday. The precious me00000000000000000tal extends the decline as a hot US inflation report and ongoing tensions in the Middle East fueled expectations for higher-for-longer US Federal Reserve (Fed) interest rates.
US Central Command (CENTCOM) said the US began launching strikes in Iran on Wednesday, adding that the attacks are “in response to Iran’s unwarranted and continued aggression.” This action came after US President Donald Trump stated earlier Wednesday that Washington would hit Iran “very hard” again, escalating his public threats as he pressed Tehran to sign a deal.
Data released by the US Bureau of Labor Statistics (BLS) on Wednesday showed that the US Consumer Price Index (CPI) rose 4.2% YoY in May, compared to 3.8% in April. This figure registered the highest level in three years and came in line with the market expectation.
On a monthly basis, the CPI increased by 0.5%, matching analysts' estimates. The core CPI, which excludes volatile food and energy prices, rose 0.2% and 2.9% on a monthly and yearly basis, respectively.
The Fed is widely expected to hold rates steady at its June policy meeting. But traders expect the US central bank to raise rates by the end of the year in response to higher inflation, according to futures. It’s worth noting that Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
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