World gold prices plummet.

During the trading session on May 25th (US time), the spot price of gold fell to $4,534 per ounce. Photo: Reuters .

During the current trading session, world gold prices just recorded a sharp drop, pulling the spot price from around $4,579 /ounce down to around $4,532 /ounce, before recovering slightly to the current level of $4,540 .

Notably, the aforementioned decline wiped out the gains recorded in the May 25th (US time) trading session. During that session, the price of the precious metal maintained its impressive recovery, closing up $60.8 to $4,569.3 per ounce. The June gold futures contract in the US also closed up 0.5% at $4,545.6 per ounce. However, under pressure from profit-taking by investors, the price of gold reversed sharply downwards.

Over the past month, the price of gold worldwide has fallen by 3.4%. Since the end of February, when the US and Israel launched attacks on Iran, the price of gold has lost approximately 14% of its value.

The reversal in global gold prices occurred amidst renewed geopolitical tensions in the Middle East.

Recently, Iran's top negotiator and foreign minister were in Doha, Qatar, to discuss a potential agreement with the US to end the three-month-long war with the Qatari prime minister , according to Reuters.

However, both Washington and Tehran have lowered expectations for a breakthrough in negotiations anytime soon.

While the negotiations were underway, the U.S. military conducted airstrikes in southern Iran targeting various objectives, including ships suspected of attempting to lay mines and missile launchers.

According to the U.S. Central Command (CENTCOM), the airstrikes were conducted for self-defense and to protect U.S. forces from threats posed by Iranian forces.

Following this development, crude oil prices reversed course and began to rise again.

High crude oil prices could increase inflationary pressure and force interest rates to remain high for an extended period. While gold is often seen as an inflation hedge, a high-interest-rate environment is detrimental to the precious metal because it is a non-yielding asset.

According to CME Group's FedWatch tool, the market is currently pricing in the likelihood that the Federal Reserve (Fed) will raise interest rates before the end of the year, with a 54% probability that the Fed will raise rates in December.

In other metals markets, spot silver prices fell 0.8% to $77.42 per ounce, platinum dropped 0.5% to $1,958.18 per ounce, while palladium declined 0.6% to $1,389.68 per ounce.