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Gold prices fall to more than 7-week low due to Iran conflict

Quick Look

Affected by the conflict between the United States and Iran, which pushed up oil prices and raised concerns about inflation, spot gold fell 3.3% to $4,146.51 an ounce on Monday, hitting a new low in more than seven weeks.
A stronger U.S. dollar, rising U.S. bond yields and higher interest rates have weakened gold's appeal, and silver, platinum and palladium have also fallen simultaneously.

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Why It Matters

Gold has traditionally been seen as a hedge against inflation, but its appeal has been eroded by a higher interest rate environment as investors prefer assets that bring income.

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Gold prices are falling. (Bloomberg)

[Financial Channel/Comprehensive Report] The price of gold is falling due to the impact of the war between the United States and Iran that has pushed up fuel prices and raised concerns about inflation.

Spot gold prices fell 3.3% on Monday (28th), hitting $4,146.51 per ounce, setting a new low in more than seven weeks.

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This is the lowest level for gold prices since August 5. U.S. gold futures also fell 3.3% to $4,178.40 an ounce.

While gold has traditionally been seen as a hedge against inflation, higher interest rates have dented the metal's appeal as investors prefer assets that generate yields.

In addition, rising oil prices, a stronger U.S. dollar and rising U.S. Treasury yields have heightened concerns about inflation, further creating headwinds for gold.

Sherif Othman, chief executive of Poise Investment Advisors, said: "Gold does not earn interest, so when U.S. Treasury yields rise, investors will turn away from gold, which will affect its value."

The Federal Reserve raised its benchmark interest rate by 25 basis points earlier this month and signaled it may raise rates at least one more time in the coming months.

The dollar held steady near a two-month high, while oil prices rose about 3% as U.S. President Donald Trump rejected Iran's proposal to resolve the conflict and reopen the Strait of Hormuz. These factors have prompted several policymakers to warn that inflation risks remain at high levels and that interest rates may need to rise further; Cleveland Fed President Beth Hammack was one of the latest officials to reiterate that view.

Market analyst Jim Wyckoff said U.S. Treasury yields and a stronger dollar were creating a perfect storm to push metal prices sharply lower.

Spot silver prices also fell 4.7% to $61.27 an ounce; platinum fell 2.9% to $1,726.30; palladium fell 4.4% to $1,211.45.

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What to Watch

AI outlook — possibilities, not facts

If the conflict between the United States and Iran continues to escalate, oil prices may further push up inflation expectations, and the dollar may remain strong.
Likely · Within weeks
The Fed is likely to raise interest rates at least one more time in the coming months
Likely · Within months

Open Questions

Will the US-Iran conflict escalate further?
Will the Fed continue to raise interest rates in the coming months?
How long can the dollar's strong trend last?

Gold prices fall to more than 7-week low due to Iran conflict

Quick Look

Affected by the conflict between the United States and Iran, which pushed up oil prices and raised concerns about inflation, spot gold fell 3.3% to $4,146.51 an ounce on Monday, hitting a new low in more than seven weeks.
A stronger U.S. dollar, rising U.S. bond yields and higher interest rates have weakened gold's appeal, and silver, platinum and palladium have also fallen simultaneously.