Gold Prices Today: Iran Conflict, US Strikes & Market Analysis

Gold prices stabilized Monday after a sharp sell-off triggered by U.S. President Donald Trump’s postponement of military strikes against Iran, though the precious metal remained down for a ninth consecutive session. Spot gold declined 0.9% to $4,448.32 per ounce by 13:14 GMT, after earlier falling over 8% to a session low of $4,097.99, according to Reuters data.

The initial plunge came as investors reassessed the safe-haven appeal of gold amid shifting expectations regarding the Iran conflict and rising U.S. Interest rates. Trump announced he would postpone strikes on Iranian energy infrastructure following what he described as “good and productive” talks between the two nations. Oil prices subsequently fell, and the dollar weakened, briefly bolstering gold’s price.

Despite the momentary rebound, gold has experienced a significant downturn since the beginning of the conflict with Iran, losing around 25% of its value since hitting a record high of $5,594.92 per ounce at the conclude of January. Last week alone, the metal shed almost 10% in its worst weekly performance since September 2011.

Analysts point to a confluence of factors driving the decline. While the outbreak of hostilities initially spurred a surge in gold prices, as is typical during geopolitical uncertainty, the rally quickly stalled. The primary headwind, according to experts at Morningstar, is the strengthening U.S. Dollar and rising energy prices, which are simultaneously pushing up inflation expectations and interest rates.

“Gold is more of a hedge against the wider impact of conflicts, rather than direct wartime threats,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. This pattern mirrors previous events, such as Russia’s invasion of Ukraine in 2022 and earlier conflicts in the Middle East, where initial price jumps were followed by a retreat as investors sought liquidity and alternative assets like energy.

The “oil-shock paradox,” as described by Daniel Marburger, CEO at StoneX Bullion, is playing out in the current market. Energy inflation driven by the conflict is bolstering the dollar and interest rates, counteracting the typical inflationary benefits that would normally accrue to gold. Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, making government bonds more attractive to investors.

The Federal Reserve’s stance on maintaining steady interest rates, despite inflationary pressures, is also contributing to the downward pressure on gold. Treasury yields have risen, further diminishing the appeal of the precious metal.

Silver, another precious metal often considered a safe haven, also experienced volatility, falling to a year-to-date low before recovering to trade at $69.97, up 3.3% on Monday. Gold futures settled 0.7% lower, at $4,574, having earlier dipped almost 10%.

Despite the recent decline, some analysts believe the long-term case for gold remains intact, citing continued central bank demand and increasing geopolitical fragmentation as supportive factors. However, the immediate outlook remains uncertain as markets continue to assess the evolving situation in the Middle East and the potential for further escalation.

Iran’s Fars news agency, citing an unnamed source, stated Notice no direct or indirect communications with the U.S., despite Trump’s claims of constructive talks. The status of those talks, and any potential resumption of military action, will likely continue to influence gold prices in the coming days.