Geopolitical Tensions Can't Save Gold as Oil Prices Soar

Gold prices slipped to $4,062.30 on Thursday, a 1.76% decline from the previous day's close of $4,135.00, as rising oil prices and bond yields eclipsed the safe-haven appeal of escalating Middle East tensions.

The retreat came despite mounting geopolitical risk, with US forces conducting airstrikes against Iranian targets for the twelfth consecutive night and Iran-backed Houthi rebels attacking two Saudi oil tankers in the Red Sea.

However, higher energy prices are stoking inflation expectations, raising the probability of further Federal Reserve tightening, and overwhelming geopolitical anxiety.

Analysts at Bank of America have flagged a 'death cross' as a warning signal, while Citi trimmed its three-month target to $3,500 is possible. BMO lowered its third-quarter average forecast to $4,625.