Gold falls on oil-driven inflation fears; US-Iran developments in focus

Gold ​fell in choppy trade on Thursday as elevated oil prices fuelled fears of ‌inflation and prolonged high interest rates, while investors looked for clarity on stalled peace talks between the U.S. and Iran. Spot gold was down 0.7% at $4,705.09 per ounce, as of 0215 GMT. U.S. gold ​futures for June delivery fell 0.6% to $4,722.10. Brent crude oil prices remained above $100 a ​barrel after larger-than-expected gasoline and distillate stock draws in the United States, ⁠and over a lack of progress on the peace talks. “The sight of Brent oil ​back at triple digits is keeping inflation worries at the forefront, and is putting gold ​on the back foot today,” said Tim Waterer, chief market analyst at KCM Trade. Higher crude oil prices can stoke inflation by raising transportation and production costs, increasing the likelihood of higher interest rates. While gold ​is considered an inflation hedge, high interest rates make yield-bearing assets more attractive, weighing ​on bullion’s appeal.