Gold Prices Slip as Fresh U.S. Strikes on Iran Lift Dollar and Oil

Gold and Precious Metals Retreat After U.S. Strikes

Spot gold fell 0.9% to $4,529.07 an ounce by 01:46 ET (05:46 GMT) on Tuesday, while gold futures were broadly steady at $4,560.92 per ounce. The move lower followed reports on Monday evening that the United States had carried out fresh military strikes against Iran.

Other precious metals also weakened. Spot silver declined 2.1% to $76.4330 per ounce, and spot platinum slipped 0.7% to $1,951.33 per ounce. These moves came after several sessions of gains, during which markets had responded to reports that the U.S. and Iran were close to a framework deal to reopen the Strait of Hormuz.

According to U.S. media reports, the latest military action targeted missile launch sites and mine-laying boats in southern Iran. U.S. Central Command presented the strikes as “self defence” and stated that the U.S.-Iran ceasefire remained in place. Iranian officials, however, warned that any new attacks on the country’s military would be met with retaliation.

Dollar Steadies, Oil Rebounds, Inflation Concerns Persist

The developments helped the dollar steady from recent losses and contributed to a rebound in oil prices after a week of declines. The recovery in oil prices renewed market concerns over the inflationary impact of the Iran war.

Fears that energy-driven inflation will prompt more hawkish central bank policies have weighed on gold prices this year. Markets are now pricing in a 40% probability that the Federal Reserve will raise interest rates by 25 basis points by the end of the year, a scenario considered negative for gold because higher rates increase the opportunity cost of holding non-yielding assets.

Beyond the Federal Reserve, other major central banks have also signaled potential rate hikes aimed at countering inflation linked to the Iran conflict. U.S. Secretary of State Marco Rubio said a U.S.-Iran deal would “take a few days” and warned that the Strait of Hormuz would reopen “one way or another,” adding further uncertainty to the outlook for regional tensions and related market impacts.

FAQ

Why did gold prices fall on Tuesday?
Gold prices fell after news of fresh U.S. military strikes on Iran strengthened the dollar, lifted oil prices, and dampened optimism over a potential U.S.-Iran peace deal, all of which pressured bullion.

How did other precious metals perform?
Spot silver dropped 2.1% to $76.4330 per ounce, while spot platinum declined 0.7% to $1,951.33 per ounce, reversing part of their recent gains.

How are interest rate expectations affecting gold?
Markets are pricing in a 40% chance that the Federal Reserve will raise interest rates by 25 basis points by year-end, and expectations of higher rates are weighing on gold because they raise the opportunity cost of holding non-yielding assets.

What role does the Iran conflict play in inflation concerns?
The Iran war has contributed to higher oil prices, and markets are concerned that energy-driven inflation could prompt more hawkish policies from global central banks, which would be negative for gold prices.