Gold prices stabilized during Asian trading on Monday after briefly dropping below key psychological levels earlier in the session. Investors remained focused on developments surrounding the U.S.-Israel conflict with Iran, which continues to influence global markets.
Market caution also increased ahead of this week’s Federal Reserve policy meeting, as traders worry that the central bank could maintain a hawkish stance due to persistent inflation pressures.
By 01:47 ET (05:47 GMT), spot gold was trading at $5,016.84 per ounce, holding relatively steady after earlier volatility. Meanwhile, gold futures declined by 0.8% to $5,020.76 per ounce. Earlier in the session, spot gold briefly slipped below the $5,000 per ounce level before recovering.
Iran conflict continues to drive market uncertainty
The conflict involving Iran, the United States, and Israel showed little sign of easing after reports that U.S. and Israeli forces targeted a major export terminal over the weekend. The strikes triggered strong retaliation from Tehran, raising concerns about further escalation in the region.
Oil prices remained above $100 per barrel, reflecting ongoing fears about potential supply disruptions in the Middle East. However, prices trimmed some of their gains on Monday after U.S. President Donald Trump said discussions were underway about forming a coalition to reopen a key shipping route that Iran had blocked.
Trump also stated that the conflict could end soon, although Iranian officials have repeatedly rejected those claims.
Despite geopolitical tensions, gold has not seen a major safe-haven surge during the conflict. Analysts say the metal has underperformed because concerns about higher interest rates have offset demand for traditional safe-haven assets.
According to analysts at ANZ, gold has struggled amid a stronger U.S. dollar, rising bond yields, and uncertainty surrounding Federal Reserve policy. They also noted that forced liquidations by traders meeting margin calls contributed to the recent weakness in gold prices.
However, ANZ emphasized that gold’s long-term role as a hedge against geopolitical risk remains intact. The precious metal is still up roughly 16% since the start of 2026, reflecting continued investor interest in defensive assets.
Mixed performance across precious metals
Other precious metals showed mixed performance as the U.S. dollar strengthened. Spot silver declined by 0.3% to $80.2605 per ounce, while spot platinum rose 1.8% to $2,064.22 per ounce.
Markets await Federal Reserve policy decision
Investors are now closely watching the upcoming Federal Reserve meeting, where policymakers are widely expected to leave interest rates unchanged.
Market expectations for a rate hold have increased amid uncertainty about the economic outlook, particularly as rising energy prices linked to the Iran conflict could push inflation higher.
The Federal Reserve’s independence also drew attention last week after a U.S. judge blocked subpoenas issued by the Department of Justice against Fed Chair Jerome Powell over alleged cost overruns.
Powell argued that the subpoenas were intended to pressure the central bank into cutting interest rates. The court ruled in favor of Powell, temporarily blocking the legal action.
The case had raised concerns about potential political pressure on the Federal Reserve. However, the Department of Justice announced that it plans to appeal the ruling, meaning the dispute could ultimately reach the U.S. Supreme Court.
