Gold Falls as Dollar Firms on Oil-Driven Inflation Fears

Key Moments

Spot gold declined 0.2% to $5,165.73 per ounce, with U.S. April futures also down 0.2% to $5,171.40 by 01:03 GMT.
The U.S. dollar rose 0.2%, pressuring dollar-denominated commodities while oil prices jumped amid renewed supply disruptions.
U.S. CPI increased 0.3% in February and 2.4% year-to-date through February, with markets awaiting January PCE data on Friday.

Gold Pulls Back as Dollar Gains

Gold prices moved lower on Thursday as a firmer U.S. dollar and renewed concerns about inflation reduced expectations for imminent interest rate cuts.

By 01:03 GMT, spot gold fell 0.2% to $5,165.73 per ounce. U.S. gold futures for April delivery also slipped 0.2% to $5,171.40.

The U.S. dollar advanced 0.2%, increasing the cost of dollar-priced commodities such as gold for buyers using other currencies.

Oil Shock Fears Escalate

Inflation worries intensified as oil prices surged, driven by escalating supply risks and geopolitical tensions.

Iran stated that the world must prepare for oil prices to hit $200 per barrel after its forces attacked commercial vessels on Wednesday. Meanwhile, the International Energy Agency (IEA) recommended releasing massive strategic reserves to mitigate one of the worst oil shocks since the 1970s.

Oil prices jumped at the start of trading, amplifying inflationary pressures while supplies from the Gulf remain constrained amid the U.S.-Israeli war on Iran.

Strait of Hormuz Disruption Deepens Supply Strain

According to sources, Iran has planted approximately 12 mines in the Strait of Hormuz, complicating efforts to reopen this critical corridor for global oil and liquefied natural gas (LNG) flows.

The fighting has effectively closed the Strait of Hormuz, leaving tankers stranded for more than a week and forcing producers to suspend production as storage capacity nears its limit.

Market / Indicator	Latest Move	Level / Detail
Spot gold	-0.2%	$5,165.73 per ounce (by 01:03 GMT)
U.S. gold futures (April)	-0.2%	$5,171.40 per ounce
U.S. dollar	+0.2%	Stronger against major counterparts
U.S. CPI (February, m/m)	+0.3%	Versus +0.2% in January
U.S. CPI (year-to-date through February)	In line with forecasts	+2.4%

U.S. Inflation Data in Focus

On the macroeconomic front, U.S. Consumer Price Index (CPI) data showed a 0.3% rise in February, matching market expectations and accelerating from a 0.2% increase in January. The index has gained 2.4% year-to-date through February, also in line with forecasts.

Investors are now looking ahead to the delayed release of January’s Personal Consumption Expenditures (PCE) price index data on Friday for further insight into inflation dynamics.