Gold Falls as US-Iran Tensions Over Hormuz Push Oil Higher

WHAT HAPPENED

Gold came under pressure on Thursday as rising tensions between the US and Iran around the Strait of Hormuz pushed oil prices higher, reigniting inflation concerns and weighing on bullion.

MARKET REACTION

XAUUSD dropped as much as 1.6% during the session, hitting lows near 4690 before recovering slightly during US trading hours.

At the time of writing, gold is holding around 4694.

Other metals also saw weakness:

• Silver fell nearly 3%
• Platinum and palladium declined alongside gold

WHY IT MOVED

The move was largely driven by geopolitical tensions in the Middle East.

The US and Iran remain locked in a standoff over the Strait of Hormuz, a critical global oil route. With both sides maintaining blockades and no progress in negotiations, markets are starting to price in supply risks.

As a result:

• Brent crude pushed above $106 per barrel
• The US dollar strengthened
• Treasury yields moved higher

This combination is typically negative for gold.

BIGGER CONTEXT

Since the conflict escalated earlier this year, rising energy prices have been feeding inflation concerns globally.

That creates a problem for gold.

Higher inflation → central banks stay hawkish → interest rates remain elevated → non-yielding assets like gold become less attractive

So even though geopolitical risk usually supports gold, the inflation angle is currently dominating.

KEY LEVELS

• Resistance: 4720 – 4730
• Support: 4650 – 4620

MARKET SENTIMENT

The overall tone feels cautious.

Large players are not aggressively positioning right now, mainly due to the uncertainty around geopolitical developments.

As one market analyst noted, conditions remain “volatile” and traders are hesitant to take big bets.

WHAT’S NEXT

Markets will continue to track:

• Developments in the US–Iran situation
• Oil price movement
• Bond yields and dollar strength

Any escalation could increase volatility further, while signs of de-escalation may ease pressure on gold.

CONCLUSION

Gold is currently caught between geopolitical tension and inflation fears.

For now, rising yields and a stronger dollar are taking control, keeping pressure on prices despite the broader uncertainty.