Finance1 min read

Gold drops to over one-year low as fading Middle East peace hopes fan inflation fears

By · Published by Everything Blog

In short

The downturn across precious metals followed remarks from U.S. President Donald Trump indicating the U.S. does not need a deal with Iran, which propelled oil prices higher. Combined with Tuesday's strong inflation reading and hawkish Fed signals, markets responded by boosting expectations for imminent monetary tightening. The selloff extended well beyond gold, with spot silver, platinum, and palladium also retreating substantially. Investors now look to Friday's release of the U.S. producer price index for the next indication of inflation trends.

Key points

  • Heightened expectations of aggressive Federal Reserve rate hikes continue to undermine de…: Heightened expectations of aggressive Federal Reserve rate hikes continue to undermine demand for non-yielding assets.
  • Escalating energy costs driven by Middle East geopolitical strains are actively reinforci…: Escalating energy costs driven by Middle East geopolitical strains are actively reinforcing persistent inflation worries.
  • Broader market turbulence and triggered stop-loss orders have accelerated liquidations ac…: Broader market turbulence and triggered stop-loss orders have accelerated liquidations across the entire precious metals sector.

Sources checked by our analysis pipeline: 1

* Trump says 'we don't need a deal with Iran'

* Spot gold hits lowest since October 2025

* Dollar near 19-month peak

* US PPI data due on Friday

(Updates prices for US closing hours)

By Vedika Thorat

Nov 12 (Reuters) - Gold prices slid 3% on Thursday, extending losses for a third straight session to hit a more-than-one-year low, as oil prices climbed on fading hopes for peace in the Middle East that spurred fears of higher inflation and elevated interest rates.

Spot gold dipped 2.7% to $3,880.93 per ounce by 1:53 p.m. ET (1855 GMT), having touched its lowest level since October 2025 earlier in the session.

US gold futures for December delivery settled 2.9% lower at $3,885.30 per ounce.

US President Donald Trump said on social media that the US did not need a deal with Iran, quashing hopes of a deal to end the conflict.

Oil rose, fanning inflationary concerns and expectations that the US Federal Reserve could keep interest rates higher for longer.

"Higher energy prices continue to warrant a hawkish Fed, and a…

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