WASHINGTON (dpa-AFX) - Extending the losses from the two previous sessions, gold prices have moved lower on Friday as attacks in the gulf region intensify, stoking broader inflationary concerns, with expectations of a rate cut by the U.S. Federal Reserve in the short-term fading completely.
Front Month Comex Gold for April delivery has slid by $30.10 (or 0.65%) to $4,575.60 per troy ounce.
Front Month Comex Silver for April delivery has plunged by $1.489 (or 2.10%) to $69.485 per troy ounce.
In the gulf war, Iranian drones struck Kuwait's largest oil refinery, Mina al-Ahmadi, which process around 730,000 barrels of oil per day, leading to the shutdown of several units of the facility.
Yesterday, following Israel's massive attacks on Iran's South Pars gas field, Iran conducted strikes on an oil refinery in the northern city of Haifa, Israel and Ras Laffan, Qatar.
Ras Laffan, Qatar's largest LNG plant, halted operations due to the strikes. The state-owned QatarEnergy announced that the repairs would take more than an year as the damage was extensive.
Prior to these attacks, Iran conducted drone attacks on Saudi Aramco's SAMREF refinery in Yanbu.
Since the conflict began on February 28, tanker traffic through the Strait of Hormuz has been virtually blocked, catapulting crude oil prices, and in turn, increasing concerns of long-term inflation globally, prompting major central banks to adopt a 'hawkish' stance supporting the U.S. dollar.
Investors have been moving away from gold to the U.S. dollar as the yellow metal turns expensive for overseas buyers.
Reportedly, the Pentagon is seeking over $200 billion from the U.S. Congress to fund U.S. forces in the ongoing gulf war.
With $11 billion already spent by the U.S. in the first week of war alone, the expenditure could exceed more than half of Iran's annual Gross Domestic Product (which stands at $356.51 billion in 2025) and hence experts are concerned about the implications on the global economy.
Today, as the U.S.-Israel versus Iran war enters day number twenty-one, Iran announced that it will show 'zero restraint' if its facilities are attacked again.
Some solace came from a message from Israel's Prime Minister Benjamin Netanyahu who stated that Israel would comply with U.S. President Donald Trump's demand to refrain from attacking Iran's critical energy sites.
Trump also confirmed that the U.S. has no plans to send its troops to the Middle East and reiterated that his administration will do whatever is necessary to keep soaring oil prices in check.
Gold made an initial recovery from yesterday's losses following the announcements by the U.S. and Israeli leaders.
In an interview with Fox Business, U.S. Treasury Secretary Scott Bessent stated that the U.S. is considering lifting sanctions on some Iranian oil already at sea to make more oil more available to global buyers.
With around 140 million barrels of Iranian crude oil stranded at sea, countries such as India, Japan, and Malaysia would benefit from this move.
The U.S. Federal Reserve held the interest rates at the same level of 3.50% to 3.75% on Wednesday.
Citing inflationary pressures and the prevailing 'uncertainty' due to the gulf war, the central bank hinted that it may loosen up the rates by the year-end if inflation falls within control.
In 2025, gold and silver rallied, hitting new highs and surging nearly 66% and 135% respectively.
Following the Middle East war, volatility in oil prices and its effects on global inflation turned investors away from the yellow metal as the U.S. dollar enjoyed their attraction.
Today, the U.S. dollar index was last seen trading at 99.56, up by 0.28 points (or 0.28%).
The CME Group's FedWatch Tool was last seen scaling down the odds for a rate cut completely, with investors now betting on a 14.5% chance of a 25-basis-point interest rate hike and an 85.5% chance that the rates will remain at the current level at the Fed's April 28-29 meeting.
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