Key facts
- Gold prices fell for a third consecutive month in May.
- The Middle East conflict boosted energy markets, increasing inflation concerns.
- Higher inflation concerns and a stronger US dollar reduced expectations for Federal Reserve rate cuts.
- Some energy-importing nations' central banks liquidated gold reserves.
Gold's performance in May was impacted by a confluence of factors stemming from the Middle East conflict. While typically a safe-haven asset, the conflict's effect on energy prices, inflation, and interest rate expectations created an environment less favorable for gold. The shift in investor focus towards these broader economic implications, rather than a direct flight to safety, highlights the complex dynamics influencing gold prices.