Gold prices declined on Monday but remained above their earlier session lows as escalating tensions between the United States, Israel, and Iran boosted demand for the U.S. dollar and pushed oil prices sharply higher.
Despite the pullback, bullion continued to trade comfortably above the $5,000 per ounce level, supported by persistent safe-haven demand as geopolitical risks intensified.
Spot gold dropped 1% to $5,117.82 per ounce by 02:40 ET (06:40 GMT), while gold futures declined 0.7% to $5,123.66 per ounce. Earlier in the session, spot prices briefly touched a low of $5,015.23 per ounce before recovering part of the decline.
The precious metal has benefited from strong demand for defensive assets since the outbreak of the U.S.-Israel conflict with Iran. However, concerns that the war could fuel global inflation have limited gold’s gains, as higher inflation may push central banks toward a more hawkish monetary policy stance.
Over the past week, the U.S. dollar has outperformed gold, while oil prices have recorded the strongest gains among major commodities due to fears of supply disruptions in global crude markets.
Energy prices surged again on Monday after U.S. and Israeli airstrikes targeted Iranian oil facilities, raising the possibility of further escalation in the conflict. The U.S. dollar index rose about 0.6%, while Brent crude oil jumped as much as 30%, climbing above the $100 per barrel level.
Oil prices later trimmed some of those gains after reports that Group of Seven (G7) nations were considering releasing oil from emergency reserves to ease potential supply shortages.
In addition, Bloomberg reported that Saudi Arabia had offered crude oil in the spot market — an unusual move for the kingdom — suggesting efforts to stabilize global supply.
Meanwhile, Iran was reported to have attacked vessels in the Strait of Hormuz over the weekend. The strategic shipping route carries roughly 20% of the world’s oil supply, and any disruption could significantly impact global energy markets.
Gold prices have experienced considerable volatility in recent weeks. The metal declined about 2% last week and has continued to fluctuate between the $5,000 level and its record high near $5,600 per ounce reached in late January.
Market swings have been amplified by speculative trading activity and growing uncertainty over the future path of global interest rates.
Unexpectedly weak U.S. nonfarm payrolls data released on Friday briefly raised expectations that the Federal Reserve might consider lowering interest rates. However, the surge in oil prices has shifted market attention back toward inflation risks.
Other precious metals also faced pressure on Monday. Silver briefly fell below the $80 per ounce level before recovering most of its losses. Spot silver was last down 0.6% at $83.80 per ounce.
Platinum prices also declined, with spot platinum falling 0.6% to $83.81 per ounce, though both metals traded above their intraday lows.
Like gold, silver and platinum have experienced significant volatility since a sharp market correction in late January. Despite the swings, both metals remain higher for the year, supported by their safe-haven characteristics and expectations of stronger industrial demand.
Among industrial metals, copper futures slipped 0.4% to $12,817 per ton.
