WASHINGTON (dpa-AFX) - Reversing the gains made yesterday, gold prices have tumbled on Wednesday as the Middle East war looks to continue far longer than expected as Iran toughens its stance. Soaring oil prices have emboldened long-term inflationary concerns, strengthening the U.S. dollar value and pulling down gold.
Front Month Comex Gold for April delivery has slumped by $110.80 (or 2.21%) to $4,897.40 per troy ounce.
Front Month Comex Silver for April delivery has also tumbled by $2.306 (or 2.90%) to $77.345 per troy ounce.
The war between U.S.-Israel and Iran entered the nineteenth day.
Iran launched more fiercer attacks on Israel to retaliate against the killing of its Chief of Security Ali Larijani and Basij Force Commander Gholamreza Soleimani. Iran also targeted the U.S. embassy in Baghdad, Iraq.
Israel intensified attacks across Iran and Lebanon.
Israel's Defense Minister Israel Katz announced that in an overnight attack conducted by the Israeli Defense Forces, Iran's Intelligence Minister Esmail Khatib was killed.
Expectations of any back-channel negotiations between the U.S. and Iran to end the war sooner, faded away after Reuters quoted a senior Iranian official as stating that the incumbent Supreme Leader Mojtaba Khamenei has rejected any peace proposal to end the war. Khamenei has reportedly taken this hardline stance to avenge Iran's martyrs.
The crucial Strait of Hormuz remains closed except for a very few vessels being allowed to pass.
Since the start of the war, oil prices have risen more than 40%. Global economies are concerned about tackling the inflation due to oil price surge.
U.S. President Donald Trump's call to U.S. allies to join hands with him to secure and protect the strait evoked no response, including NATO nations.
Frustrated, Trump sent strongly worded messages through his social media platform criticizing them.
Later, Trump asserted that the U.S. does not want any help. Of note, Trump remarked that this war was a 'great test' of NATO alliance's relations with the U.S.
The U.S. allies do not want to get involved in the war as they were not consulted before the U.S. began its attacks.
In the U.S. today, the Mortgage Bankers Association of America's Purchase Index increased to 172.90 in the week ended March 13 from 171.30 of the previous week.
Data provided by the U.S. Labor Department revealed that producer prices rose by 0.70% month-over-month in February (above 0.50% in January) higher than forecasts of 0.30%. Year-over-year, prices jumped 3.40% in February.
Core producer prices (which exclude food and energy) rose by 0.50% from the previous month in February, slowing from a 0.80% advance in January. On an year-on-year basis, core prices surge by 3.90%.
Usually considered a safe bet during times of heightened geopolitical tensions, since February 28, gold has not galloped as expected. Gold prices have been ranging around the $5,000 to $5,200 per ounce.
Experts feel that since gold is traded in the U.S. dollar, a strengthening dollar makes the yellow metal more expensive for overseas buyers and consequently lowering the demand.
In addition, the rise in oil prices pushes inflation higher, which compels major central banks to either hold the interest rates or increase them.
When rates stay higher, appeal for gold diminishes as it is a non-yielding asset that does not pay any interest while other investments reward investors.
Analysts contend that weaker jewelry-demand in retail due to high costs and the 'wait-and-watch' mode adopted by central banks on increasing their holdings could weigh down on gold prices in the coming days.
The U.S. Federal Reserve is set to announce its interest rates a little later.
Analysts have trimmed down their expectations of any lowering of rates as the central bank would focus on containing inflation rather than supporting the job market.
Copyright(c) 2026 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2026 AFX News
