WASHINGTON (dpa-AFX) - Gold prices have plummeted on Thursday, extending yesterday's losses amid fresh escalation in the gulf war, with Israel and Iran trading attacks on energy facilities. Accelerated concerns of inflation due to the subsequent surge in oil prices are driving investors away from precious metals.
Front Month Comex Gold for April delivery has plunged by $289.50 (or 5.91%) to $4,606.70 per troy ounce.
Front Month Comex Silver for April delivery has also nosedived by $6.577 (or 8.50%) to $70.755 per troy ounce.
On the twentieth day of the ongoing gulf war, after Israel struck Iran's South Pars gasfield, Iran retaliated by targeting energy sites in Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait.
The South Pars, critical for Iran's domestic energy needs and economy, is a part of the world's largest natural gas field, shared by Iran and Qatar.
Specifically, Qatar's critical LNG hub Ras Laffan was attacked and left with severe damage. Qatar has expelled Iran's military and security attaches.
U.S. President Donald Trump threatened to completely 'blow up' Iran's largest gas field if attacks on Qatar again.
Iran's Foreign Minister Abbas Araghchi warned countries against allying with the U.S. to reopen the Strait of Hormuz.
Addressing a press conference at the Pentagon, U.S. Defense Secretary Pete Hegseth observed that the U.S. was on its route to reaching its goal in the gulf war but declined to give a timeline on when the operation could likely end.
Hegseth was joined by the Chairman of the Joint Chiefs of Staff General Dan Caine, who stated that the U.S. is carrying out strikes against Iran-linked militant groups in Iraq and efforts are underway to 'take out' Iran's mine storage facilities and naval ammunition depots.
The U.S. stands alone in the war after U.S. President Donald Trump's call for support from NATO nations and other U.S. allies failed to evoke any positive response. Lashing out at NATO members, Trump claimed later that the U.S. does not need any help from anyone.
Already the conflict brought shipping transit through the Strait of Hormuz virtually to a halt. Damage to oil and natural gas facilities in the gulf has added a new dimension to the consequences.
The 'uncertain impacts' due to the Middle East escalation prompted the U.S. Federal Reserve to keep interest rates steady yesterday. The Bank of Japan and the Swiss National Bank also followed suit.
As chances of rate cuts by central banks disappear, interest-bearing assets attract investors over non-yielding assets. A broader risk-off sentiment is pulling down gold and silver prices.
Economists feel that macroeconomic pressure due to concerns of inflation getting out of control is overriding fears of geopolitical instability which is weighing down on precious metals.
Data released by the U.S. Department of Labor today revealed that initial jobless claims fell by 8,000 from the previous week to 205,000 in the second week of March. The figures are firmly below expectations of a 2,000 increase.
Continuing jobless claims increased to 1,857,000 in the week ending March 7 from 1,847,000 in the previous week.
Jobless claims' four-week average decreased to 210,750 in the week March 14 from 211,500 in the previous week.
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