Gold Sharply Drops to Seven-Month Low
Gold prices slid to their lowest level since November 2025, pressured by expectations of tighter monetary policy in the United States. The move came alongside renewed uncertainty in the Middle East following reported US military action against Iran after an American helicopter incident, which has added to concerns about the stability of a fragile ceasefire and broader regional tensions.
Silver also declined, falling 1.6% to $64.3 per ounce as part of a broader downturn across the precious metals market.
At the same time, energy markets remained elevated due to continued disruption risks in the Strait of Hormuz, a key global shipping route for oil and gas, contributing to upward pressure on crude prices.
In the United States, annual inflation rose to 4.2% in May, the highest level since April 2023. Energy prices saw the steepest increase, rising 23.5% year-on-year, while food inflation stood at 3.1%. Monthly inflation eased slightly to 0.5% from 0.6% in the previous month.
The combination of persistent inflation and higher energy costs has reinforced expectations that the US Federal Reserve may maintain elevated interest rates for a longer period or potentially introduce additional hikes before year-end.
Higher interest rates typically reduce demand for non-yielding assets such as gold and silver, as investors shift toward interest-bearing instruments offering stronger returns. Silver mirrored broader losses across the precious metals sector as investors reassessed inflation trends, energy prices, and safe-haven demand dynamics.
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