Global gold prices fell sharply on Thursday, with spot gold dropping 0.3 percent to 4,066.24 dollars per ounce in Asian trading, according to Reuters. The decline followed renewed military tensions between the United States and Iran, after US President Donald Trump declared that the memorandum to halt war with Iran was no longer valid. Shortly afterward, the US military announced new strikes against Iran in the Strait of Hormuz.

The conflict pushed oil prices higher, with crude rising about 5 percent on Wednesday and continuing upward on Thursday. Analysts warned that prolonged Middle East tensions could further raise oil prices and global inflation, prompting the US Federal Reserve to keep interest rates elevated for longer. The dollar and global stock markets also came under pressure.

The International Monetary Fund reduced its 2026 global growth forecast to 3 percent, while Bank of America cut its average gold price forecast for 2026 by 14 percent to 4,360 dollars per ounce, citing the likelihood of tighter US monetary policy.