Gold fell toward $4,000 an ounce on Thursday, resuming its decline as escalating attacks in the Middle East pushed oil prices sharply higher this week, reviving concerns about inflation and the outlook for interest rates.
The US carried out additional strikes against Iranian targets on Wednesday, though President Donald Trump said Tehran had signaled a willingness to resume negotiations.
Meanwhile, the precious metal found some support from softer US inflation data, which eased concerns over a near-term Federal Reserve rate hike.
Data released on Wednesday showed US producer prices unexpectedly declined in June for the first time in nearly a year, largely due to lower energy costs, following Tuesday’s weaker-than-expected consumer inflation report.
However, June’s inflation figures did not reflect the impact of the latest escalation in the US-Iran conflict, as the interim peace agreement reached last month has effectively unraveled.