WASHINGTON (dpa-AFX) - Extending yesterday's losses, gold prices slumped on Thursday as Iran hardens its stance against U.S.-Israeli forces. With diplomacy off the table, crude oil skyrocketed to expand inflationary pressures, weighing down on the yellow metal.
Front Month Comex Gold for April delivery declined sharply by $49.8 (or 0.96%) to $5,129.30 per troy ounce.
Front Month Comex Silver for April delivery dipped by $0.061 (or 0.07%) to $85.180 per troy ounce.
The Middle East war entered day number 13.
A blockade of oil shipments from transiting through the Strait of Hormuz continues due to offensive strike threats from Iran.
Iraq has been forced to shut down its oil ports after explosive-laden boats, reportedly from Iran, hit two fuel tankers (Safesea Vishnu and Zefyros) in Iraqi waters.
WTI Crude oil (for April delivery) was last seen trading at $94.50 a barrel, up by $7.25 (or 8.31%).
Monday's comments from U.S. President Donald Trump that the war would end 'very soon' offered a breather to markets the proved short-lived.
Reports of Iran deploying naval mines near the Strait of Hormuz antagonized Trump, who threatened Iran with severe repercussions if it fails to remove them immediately.
However, Iran merely issued a harsh verbal response but brushed aside the ultimatum.
An Iranian drone strike set fuel tanks ablaze at Oman's port of Salalah and another attack set a Thailand cargo ship on fire in the Strait of Hormuz.
Already, Iran's Islamic Revolutionary Guard Corps threatened to inflict damage on every 'economic centre and bank' associated with the U.S. and Israel and warned people to avoid hanging around a kilometer radius of these institutions.
Citigroup and Standard Chartered instructed their employees to work remotely. HSBC temporarily closed branches in Qatar.
Last week, Trump stated that the U.S. navy would escort and protect ships transiting through the Strait of Hormuz, but Reuters reported that the U.S. navy has refused to do so, citing attack risks.
In his first public message after assuming leadership, Iran's new Supreme Leader Mojtaba Khamenei warned Arab neighbors not to harbor U.S. military bases in the region failing which they would be targeted.
Khamenei also stressed that the Strait of Hormuz would remain closed as a tool to put pressure on Iran's enemies.
Geopolitical standoffs and tensions usually push gold metal prices to rise. However, despite the war aggravating day by day, fears of inflation have spooked investors.
The surge in oil prices has led to serious concerns about multi-fold increases in prices of essential products and services globally.
Central banks across the world are expected only to maintain or hike interest rates to battle inflation.
Higher rates make yielding assets such as government bonds more attractive compared to non-yielding precious metals like gold.
The U.S. Federal Reserve's next policy meeting is scheduled for March 17-18.
Market participants expect the policymakers to keep the interest rates unchanged, anticipating a 25-basis-point rate cut only around September.
Today's Labor Department data revealed that initial jobless claims edged down by 1,000 from the previous week to 213,000 for the first week of March, which came in below expectations of 215,000.
Continuing jobless claims decreased to 1,850,000 for the week ending February 28 from 1,871,000 in the previous week.
The jobless claims four-week average also decreased to 212,000 in March 7 from 216,000 in the previous week.
The U.S. dollar index was last seen trading at 99.64, up by 0.20 points (or 0.20%) today.
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