Gold prices declined during Asian trading on Thursday as investors assessed conflicting developments surrounding the Iran conflict, while strength in the U.S. dollar also reduced demand for the precious metal.
At 03:00 ET (07:00 GMT), spot gold was down 1.1% at $4,457.06 per ounce. U.S. gold futures fell 2.2% to $4,485.10.
Earlier this week, bullion had staged a rebound, briefly climbing back above $4,500 per ounce after a sharp correction. The recovery was supported by a weaker dollar and cautious optimism over diplomatic contacts between the United States and Iran.
Iran studies U.S. proposal to end fighting
However, upward momentum remained limited as uncertainty over the conflict persisted. Iran is currently reviewing a U.S. proposal designed to bring hostilities to an end, although signals remain mixed on whether negotiations will advance.
While Tehran has not formally accepted the proposal, it has also refrained from rejecting it outright, leaving open the possibility of a diplomatic path toward de-escalation.
At the same time, Iranian officials have denied engaging in direct talks with Washington and stressed that major differences remain unresolved. The uncertainty has kept markets cautious, with oil prices rising again on Thursday.
Authorities in Washington have warned that tougher measures could follow if Iran does not engage constructively.
Gold pressured by rate outlook and stronger dollar
Gold, traditionally viewed as a safe-haven asset during periods of geopolitical tension, has displayed unusual volatility in recent weeks. Earlier this month, prices dropped sharply despite rising tensions, as markets increasingly priced in the likelihood that interest rates could remain elevated for longer and the U.S. dollar strengthened.
Movements in oil markets have also influenced sentiment. Higher crude prices have intensified concerns about inflation, potentially prompting central banks to keep borrowing costs elevated. Such conditions tend to weigh on non-yielding assets like gold.
The U.S. Dollar Index was broadly unchanged on Thursday following two consecutive sessions of gains.
Among other precious metals, silver dropped 1.8% to $69.97 per ounce, while platinum declined 1.8% to $1,897.60 per ounce.
Benchmark copper futures on the London Metal Exchange fell 1.3% to $12,177.0 per ton, while U.S. copper futures slipped 0.5% to $5.49 per pound.
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