Gold retreated on Thursday, pulling back below $4,500 per ounce after just one day of gains, as conflicting signals between Washington and Tehran over the prospect of peace talks unsettled markets and prompted investors to reduce exposure to the precious metal.
Spot gold fell about 1% to $4,476 per ounce in early Asian trading, while US April gold futures shed 2.1% to $4,457, erasing a portion of the rebound recorded on Wednesday when diplomatic signals from US President Donald Trump had briefly lifted sentiment and sent the metal climbing roughly 4% in a single session.
The reversal came after Iran’s foreign minister publicly rejected the suggestion that negotiations were underway, contradicting Trump’s assertion that Tehran was eager to seal a deal. The mixed messaging left traders unable to determine whether the four-week-old conflict was moving meaningfully toward de-escalation or simply generating noise.
“In the next 24 to 48 hours, gold prices will just be about reacting to headlines about negotiations,” Kyle Rodda, a senior financial market analyst at Capital.com, said. He added that more decisive price moves are likely early next week as clarity emerges on whether a US ground escalation in Iran materialises.
Meanwhile, Brent crude climbed back above $100 per barrel as energy traders reasserted concerns about prolonged supply disruption through the Strait of Hormuz, the critical waterway that handles roughly a fifth of global oil and liquefied natural gas flows. Higher oil prices reinforce inflation expectations, which in turn strengthen the case for sustained elevated interest rates — a headwind for gold, which generates no yield.
Markets have now almost entirely priced out Federal Reserve (Fed) rate cuts for the remainder of 2026, according to CME Group’s FedWatch Tool. Before the US-Iran conflict erupted on February 28, markets had been pricing at least two rate reductions this year.
Thursday’s decline extends a volatile chapter for gold that has seen the metal trade as high as $5,608 in early February, before the war-driven inflation shock and a stronger US dollar eroded much of that gain. Gold remains roughly 20% below its all-time high, even as major banks including JPMorgan and Deutsche Bank maintain year-end targets of $6,300 and $6,000 respectively, citing central bank accumulation and structural dollar diversification as enduring supports.
Silver fell 1.9% to $69.90 per ounce, platinum dropped 1.4% to $1,893.60, and palladium declined 2% to $1,394.83.
