Gold price (XAU/USD) tumbles to around $4,800, snapping the two-day winning streak during the early Asian session on Thursday. The ongoing tensions in the Middle East created a safe-haven rush, but that momentum faded as oil prices surged. Traders will closely monitor geopolitical developments and economic indicators for fresh impetus.
Bloomberg reported on Wednesday that the US and Iran are considering a two-week ceasefire extension to allow more time to negotiate a peace deal. Nonetheless, tensions remain particularly high over the Strait of Hormuz, a critical waterway for oil and gas that’s been effectively shuttered since the start of the war almost seven weeks ago.
Rising oil prices have heightened energy inflation concerns, which are dampening expectations for interest rate cuts, weighing on the yellow metal. Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
On the other hand, higher demand from major central banks could provide some support to the precious metal. The People’s Bank of China (PBoC) has extended its gold purchasing streak to 18 consecutive months through March 2026. This trend marks a structural shift as institutions prioritize de-dollarization and diversification amid rising global instability.
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