Global Gold Prices Slump as U.S. Escalates Iran Conflict 📉

The safe-haven appeal of gold weakened significantly on Thursday after U.S. President Donald Trump signaled a continuation of aggressive military action in Iran, disrupting a four-day rally. • Overall Market Impact: Spot gold fell 1.3% to US$ 4,694.48 per ounce, while U.S. gold futures dropped 1.9% to US$ 4,723.70. This follows gold’s worst monthly performance since 2008, having dropped 11% in March. • Economic Factors: The decline was driven by a stronger U.S. dollar and rising 10-year Treasury yields. Brent oil surged over 4%, intensifying inflation concerns. However, high interest rates continue to curb gold's attractiveness, as markets price in no Fed rate cuts for the majority of 2026. • Precious Metals Sector: Broad-based selling impacted the entire sector: • Silver: Down 2.9% to US$ 72.95 • Platinum: Down 1.8% to US$ 1,928.26 • Palladium: Down 1.4% to US$ 1,451.85 • National Context: For Sri Lanka, extreme volatility in gold prices impacts the jewelry industry and the valuation of national reserves. Sustained high oil prices driven by the conflict also pose a risk to the country's energy costs and trade balance.