WASHINGTON (dpa-AFX) - Giving back ground following four sessions of gains, gold prices have slumped on Thursday as the efforts by intermediaries to end the U.S.-Iran standoff showed no breakthrough, with both nations toughening their stance against each other, thereby raising concerns of a near-term high-interest-rate regime in the U.S. In addition, traders resorted to booking profits from the sharp gains in recent trading sessions.
Front Month Comex Gold for September month delivery has moved lower by $37.40 (or 0.85%) to $4,381.00 per troy ounce.
Front Month Comex Silver for September month delivery also has tumbled by $0.740 (or 1.13%) to $64.960 per troy ounce.
The conflict between the U.S. and Iran is now in its sixth month.
Even as intermediaries are working to bring the U.S. and Iran to the negotiating table, both sides showed no sign of climbing down from their tough positions.
Yesterday, U.S. President Donald Trump asserted that the U.S. has full control over the Strait of Hormuz. Claiming the success of the U.S. naval blockade over Iranian ports, Trump claimed Iran has no money to even pay its soldiers.
Denying Trump's claims on the U.S. authority over the Strait of Hormuz strongly, Iran's Persian Gulf Strait Authority announced that the seaway remains blocked and will continue to be so until Iran's conditions are accepted.
Iran's Foreign Minister Abbas Araghchi remarked that the U.S. risks a bigger miscalculation over the Strait of Hormuz.
Following the exchange of rhetoric, experts are concerned that the gap between the U.S. and Iran could widen more.
Amid this, in collaboration with U.S. allies in gulf, Pakistan is taking efforts to bring both the nations back to the negotiating table.
Earlier this week, after announcing the finalization of a deal with Oman regarding the management of Strait of Hormuz, Iran placed several demands on the U.S.
Among others, Iran specifically wanted compensation for the damages it suffered due to the war, failing which it refused to reopen the strait.
In return, Trump asked Iran to compensate for the damages Iran caused in many other countries over the past five decades due to various conflicts.
On the economic front, data released by the U.S. Bureau of Labor Statistics today revealed producer prices were unchanged in July following a revised 0.1% dip in June and compared with market expectations of a 0.2% gain.
On a year-on-year basis, prices increased 4.7% in July, the lowest since March, after a 5.5% increase in June.
Core producer prices (which exclude food and energy goods), increased 0.2% from the previous month in July.
On a year-on-year basis, core prices jumped by 4.2% in July, in line with market expectations.
Data from the U.S. Department of Labor showed that the claims for unemployment benefits increased by 9,000 to 209,000 in the first week of August, above market expectations of 202,000.
Continuing jobless claims decreased to 1,777,000 for the week ending August 1 from 1,799,000 in the previous week.
In an interview with the Financial Times, U.S. Federal Reserve Bank of Boston President Susan Collins stated that poorer Americans are struggling to make ends meet and hence she stated that she would support an interest rate increase by the Fed.
The August 7 employment data indicated a fall far below expectations. In addition, recent data showed consumer prices to have increased 3.4% in July from the previous year.
With no sign of an end to the Middle East crisis visible, oil-linked inflationary concerns are keeping expectations of higher interest regime in the U.S. alive, pressuring gold and silver prices on the downside.
The U.S. dollar index was last seen trading at 99.96, up by 0.02 (or 0.02%) today.
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