WASHINGTON (dpa-AFX) - Gold prices have slumped on Thursday as concerns of inflation and rose after the recently renewed U.S.-Iran conflict deepened with leaders of both nations adopting a tough stance. In addition, expectations of a tighter monetary policy by the U.S. Federal Reserve following the unexpected fall in the U.S. jobless claims weighed on gold prices.
Front Month Comex Gold for August month delivery has tumbled by $59.90 (or 1.48%) to $3,991.90 per troy ounce.
Front Month Comex Silver for August month delivery has plunged by $1.202 (or 2.10%) to $56.030 per troy ounce.
The recent escalation between the U.S. and Iranian forces which began after Iran fired at a Cyprus-flagged vessel transiting the Strait of Hormuz, forcing the crew to abandon the ship and escape through lifeboats is showing no signs of pausing.
Under the command of U.S. President Donald Trump, U.S. forces attacked Iranian military targets.
Iran responded by striking the U.S. bases in several Arab countries in its neighborhood.
On June 17, the U.S. and Iran agreed to halt the war (which began on February 28) and signed a Memorandum of Understanding to resolve disputes through negotiations.
Following the signing, Iran reopened the Strait of Hormuz it had shut after the war erupted while the U.S. lifted the embargo on Iranian oil exports.
However, after the recent turn of events, Iran closed the strait while the U.S. reinstated blockade on Iranian naval ports.
On Tuesday and Wednesday, the U.S. conducted several rounds of strikes on Iran.
U.S. Central Command announced that with an intent to degrade Iran's capability to strike ships traveling through the strait, U.S. forces conducted widespread attacks on Iranian command centers, air defense sites, missile and drone capabilities, and coastal surveillance facilities.
On Tuesday, Trump warned Iran to seek a deal with the U.S. soon, failing which the U.S. may knock out Iran's bridges and power plants.
On Wednesday, cautioning Iran to behave better, Trump stated that Iran will soon be defeated.
In a separate interview with Fox Business, Trump claimed that Iran wanted a deal badly and was seeking a meeting with the U.S.
In an interview with podcaster Joe Rogan, U.S. President JD Vance stated that negotiations with Iran were essential.
Analysts are of the view that despite Trump's strongly worded messages, the possibility for a potential settlement has not eroded.
Iran's Parliamentary Speaker Mohammad Bagher Ghalibaf remarked that Iran was in an existential war with the U.S.
Ghalibaf added that if the MoU does not benefit Iran, Iran would not remain committed to it. However, he stressed that negotiation is a part of Iran's strategy of resistance.
Iran's military spokesperson Brigadier General Mohammad Akraminia stated that the Strait of Hormuz is a red line for Iran and reasserted that the seaway remains under Iran's control.
Data from the U.S. Department of Labor today revealed that the unemployment benefit claims fell by 8,000 to 208,000 for the week of July 11, far lower than forecasts of an increase to 217,000.
In addition, the continuing jobless claims decreased to 1,805,000 for the week ending July 4, from 1,821,000 of the previous week.
These numbers reinforced signs of stability in the jobs market, lowering expectations of a near-term easing of interest rates.
Tuesday's data revealed that consumer inflation slowed in June while Wednesday's index on Producer Prices showed a decline.
According to the CME Group's FedWatch Tool, currently investors are betting on a 12.30% chance of a quarter-basis-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on July 28-29 while the odds on rates being held at the current level stand at 87.70%.
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