Gold prices declined on Monday but remained above their intraday lows as escalating tensions in the U.S.-Israel conflict with Iran triggered strong demand for the U.S. dollar and crude oil.
At 08:07 ET (12:07 GMT), spot gold dropped 1.5% to $5,096.51 per ounce, while gold futures declined 1.1% to $5,104.04 per ounce. Earlier in the session, spot gold briefly fell to an intraday low of $5,015.23 per ounce.
Gold Holds Above the $5,000 Level
Despite the pullback, gold prices remain firmly above the key $5,000 per ounce level. The precious metal has benefited from increased safe-haven demand since the outbreak of the U.S.-Israel conflict with Iran. However, its upside momentum has been partly limited by concerns that the war could fuel inflation and prompt more hawkish policies from major central banks.
Over the past week, the U.S. dollar strengthened significantly, while oil prices led gains in the commodity markets. The conflict with Iran has raised fears of potential supply disruptions in global oil markets, adding upward pressure to crude prices.
Dollar and Oil Surge on Escalating Conflict
Both the dollar and oil extended their rally on Monday after U.S. and Israeli strikes targeted Iran’s oil facilities, signaling a potential escalation in the conflict. The U.S. dollar index rose 0.6%, while Brent crude surged as much as 30%, briefly moving above $100 per barrel.
However, oil prices later eased some gains after a Financial Times report suggested that G7 countries were considering releasing emergency oil reserves to stabilize supply.
In a separate development, Bloomberg reported that Saudi Arabia had begun offering oil on spot markets, an unusual step that could help offset supply disruptions.
Tensions intensified further over the weekend as Iran reportedly attacked vessels in the Strait of Hormuz, a critical maritime route responsible for roughly 20% of global oil shipments.
Gold Volatility Persists
Gold prices have experienced significant volatility in recent weeks. The metal fell about 2% last week, continuing to fluctuate between $5,000 per ounce and a record high near $5,600 reached in late January.
Market uncertainty and increased speculative activity have contributed to these sharp price movements. Additionally, investors remain divided over the future path of global interest rates.
A weaker-than-expected U.S. nonfarm payrolls report released on Friday raised expectations that interest rates could decline in the future. However, attention has quickly shifted back to the inflationary pressures created by rising oil prices.
Silver and Platinum Recover from Early Losses
Other precious metals also experienced declines on Monday. Silver briefly dropped below $80 per ounce, but later recovered most of its losses. Spot silver was last trading 1.2% lower at $83.39 per ounce.
Platinum prices fell 1.1% to $2,117.14 per ounce, although the metal remained well above its intraday lows.
Like gold, both silver and platinum have seen sharp price swings since the major market correction in late January. Nevertheless, strong safe-haven demand and expectations of rising industrial demand have helped keep both metals higher on the year.
Copper Prices Slip
Among industrial metals, copper futures declined 0.7% to $12,781 per ton, reflecting broader commodity market volatility amid geopolitical tensions and shifting economic expectations.
