Global gold prices fall as US inflation surges

Global gold prices fell sharply on Wednesday following stronger-than-expected US inflation data, which cast doubt on the prospect of Federal Reserve interest rate cuts. The inflation report, indicating a three-year high driven by rising energy prices amid Iran-Israel tensions, shifted investor focus toward the possibility of sustained higher US interest rates, dampening demand for gold.

Spot gold prices dropped 0.4 percent to $4,694.59 per ounce by 9:47 GMT, retreating from a recent three-week peak. Meanwhile, US gold futures for June delivery saw a modest rise, trading between 0.3 to 0.7 percent higher around $4,717.50 per ounce.

Analysts, including UBS’s Giovanni Staunovo, noted that elevated inflation figures may encourage the Fed to maintain higher rates longer, making gold—a non-yielding asset—less appealing compared to dollar-denominated bonds and securities.

The strengthening US dollar, reaching its highest point in over a week, compounded pressure on gold prices by increasing costs for foreign buyers.

Read More: Padma Barrage Project gets final approval from ECNEC

Investors are also eyeing the upcoming Beijing summit between US President Donald Trump and Chinese President Xi Jinping, where discussions on global trade and Middle East tensions could influence future gold price trends.

Other precious metals veered in different directions: spot silver climbed nearly 1 percent to $87.40 per ounce before settling at $86.61, platinum rose 1.4 percent to $2,156.28, and palladium gained 0.7 percent, reaching $1,500.62 per ounce.

In Bangladesh, the local bullion market reflected the global downturn. The latest price for 22-carat gold is Tk 244,711 per bhori (11.664 grams), and 21-carat gold is priced at Tk 233,572. Jewelers anticipate further adjustments may occur if global price weakness persists.