Precious metals experienced significant losses Wednesday following President Donald Trump’s announcement that the temporary peace agreement with Iran has collapsed, amid renewed military confrontations between the United States and Iran.
During early New York trading hours, spot gold decreased 1.2% to $4,057.09 per ounce. Gold futures contracts experienced even steeper losses, falling 2.2% to $4,066.56 per ounce.
At a NATO gathering in Turkey, President Trump criticized Iran for publicly contradicting agreements allegedly reached during private negotiations.
“We make a deal, and everyone’s agreed. No nuclear weapons. We make a deal. They go outside, talk to the press, they say we never even talked about it. There’s something wrong with them. They’re cuckoo. As far as I’m concerned, it’s over,” Trump stated.
According to Iran’s Islamic Revolutionary Guards Corps, its forces targeted 85 American military facilities across Kuwait and Bahrain while downing a U.S. MQ-9 unmanned aerial vehicle.
The Pentagon characterized its military operations as retaliation for Iranian assaults on commercial vessels navigating the Strait of Hormuz, a critical artery for international petroleum transport. U.S. Central Command reported engaging more than 80 targets within Iranian territory and over 60 Iranian naval craft operating in and near the strategic waterway.
Tehran has yet to acknowledge involvement in Tuesday’s attacks on commercial shipping near Oman’s coastline, which affected a Saudi petroleum tanker and a Qatari liquefied natural gas carrier.
Oil prices advanced as hostilities intensified, clawing back portions of the decline registered following the initial peace framework announcement on June 17.
The uptick in petroleum prices is reigniting concerns about a fresh inflationary surge across global economies.
Market participants are now questioning whether the Federal Reserve will respond with interest rate increases. Expectations for Fed tightening had diminished following disappointing employment figures last week, but Britannia Global Markets analysts noted that rate hike speculation is intensifying again in the wake of the latest military actions.
Elevated interest rates typically diminish gold’s appeal to investors because the precious metal generates no income. Additionally, a strengthening U.S. dollar could increase gold’s cost for international purchasers.
Lukman Otunuga, Head of Market Research at FXTM, characterized gold as standing at a “critical crossroads,” where geopolitical turmoil and inflation anxieties compete against weaker American economic indicators that might constrain the Federal Reserve’s policy options.
Investors are now anticipating the release of minutes from the Federal Reserve’s June policy meeting, scheduled for later Wednesday. The central bank maintained its benchmark rate at 3.5% to 3.75% during that session, although certain policymakers projected potential rate increases in 2026.
Other precious metals also experienced declines. Silver fell 2.61% to $58.39 per ounce, platinum decreased 3.47% to $1,589.17, and palladium lost 3.19% to $1,212.94.
President Trump’s additional remarks regarding Greenland and Spain during the same NATO summit contributed to broader anxieties about global stability, applying additional downward pressure on metals markets.
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