Gold fell to its lowest level in a month and a half during Asian trading today, as metals came under clear pressure from rising global yields and heightened tensions between the United States and Iran. Although the yellow metal managed to recover a large part of its intraday losses, the broader picture remained under pressure, with markets still concerned about the path of inflation and interest rates in the coming period.
The main pressure on gold came from the bond market, where yields rose across developed economies as investors continued selling government debt. The US 10 year Treasury yield approached its highest level in a month, while Japan’s 10 year yield reached its highest level in 29 years.
Spot gold traded near $4,538.79 per ounce after touching $4,480.79 during the session, while gold futures fell 0.5% to $4,540.67 per ounce. These moves reflect a growing market belief that the war in Iran could increase inflationary pressure through energy prices, which may push central banks to keep monetary policy tighter for longer.
For gold, this scenario does not support the upside trend, as higher interest rates increase the cost of holding a non yielding asset and direct part of market liquidity toward the dollar and fixed income instruments. The dollar benefited from these expectations, adding further pressure on precious metals. Spot silver fell 1.1% to $74.1810 per ounce, while platinum declined 0.5% to $1,968.10 per ounce.
On the geopolitical side, tensions between Washington and Tehran remained elevated, with US President Donald Trump warning that time is running out for Iran to accept a peace agreement. Concerns also increased after Iran was accused of being behind a drone strike near the Barakah nuclear plant in the UAE, a move markets viewed as a signal that the conflict could widen.
At the same time, the possibility of renewed US Israeli military action against Iran remains present, especially with limited progress in peace negotiations and no clear breakthrough on this file from Trump’s summit in China, despite talk of some trade understandings between the world’s two largest economies.
India’s decision to raise import tariffs on gold and silver from 6% to 15% also puts the jewellery sector under short term pressure, especially major retailers such as Titan, with expectations of higher domestic prices and weaker investment related demand. Morgan Stanley sees the decision as negative for sector sentiment in the near term, but believes it does not change Titan’s long term outlook, supported by its strong brand portfolio, flexible sourcing model, and expansion in organised jewellery retail.
According to the note, higher tariffs may temporarily weigh on demand, but part of this impact could be absorbed by the sharp rise in gold prices during 2025, along with a relatively weak seasonal period during Adhik Mass from May 17 to June 15 in the first quarter of 2027.
Although gold usually benefits from geopolitical tension, its safe haven appeal appeared limited this time, as concerns over interest rates and elevated yields outweighed hedging demand, keeping the yellow metal under clear pressure since the outbreak of the US Israeli war on Iran.
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