The US-Iran conflict escalated, causing gold prices to plummet by 2% during trading hours. Analysts believe that "rising interest rate expectations are making gold prices more fragile."

After the United States launched retaliatory strikes against Iran, the downward trend of gold prices continued. The conflict, which had already disrupted global markets and raised inflation risks, has also cast a shadow over peace prospects. On Wednesday, the price of gold plummeted by 2.1% to around $4173 per ounce, following a 1.6% drop the previous trading day. After President Trump accused Iran of shooting down a US military helicopter, the US military carried out attacks on Iranian targets near the Strait of Hormuz. Iran's Mehr news agency reported multiple explosions on Qeshm Island and along the country's southern coast. Due to the latest conflict threatening a fragile ceasefire agreement, the risk of almost complete closure of the Strait of Hormuz has risen. The strait is a crucial passage for Middle Eastern energy to reach global markets. Iranian Foreign Minister Abbas Araghchi posted on the social platform X, stating that Iran "will not ignore any attack or threat." Iran's state television IRIB News later reported that Iran launched a drone attack on the US Fifth Fleet stationed in Bahrain. Oil prices rebounded on Wednesday, further intensifying concerns about global inflation, leading central banks to be more inclined to maintain or raise interest rates, which in turn is negative for non-yielding precious metals. Brent crude oil prices briefly rose by 2%, breaking $93 per barrel, but later gave back gains after the US announced the end of its retaliatory action. Investors are closely watching the US inflation report to look for clues about the Federal Reserve's next move. Some investors have bet that monetary policy will tighten, with the two-year US Treasury yield reaching its highest level in over a year, which is bearish for gold, which does not pay interest. Compared to the outbreak of war in Iran at the end of February, the current gold price has fallen by about one-fifth. Recently, the gold price fell below the widely watched long-term momentum indicator of the 200-day moving average, triggering additional selling by institutional investors. Suki Cooper, global head of commodity research at Standard Chartered Bank, said in a report, "As the possibility of rate hikes increases, we expect gold prices to be more vulnerable in the short term." She pointed out that if the price of gold continues to fall, gold ETF holdings will incur losses, leading to "further downside risks for gold." Cooper stated that the next technical support level for gold is around $4100 per ounce. Currently, demand is weak in markets like India, but China remains a bright spot for demand, with local gold prices stable at a premium of less than $10 per ounce. At 1:20 pm Singapore time, spot gold fell by 2% to $4176.89 per ounce; silver fell by 2.5% to $63.75 per ounce; platinum fell by over 4%, and palladium also fell simultaneously. The US dollar spot index remained basically flat.