Gold clawed back territory in Monday morning trading after falling to a one-and-a-half-month low earlier in the trading day. The yellow metal found a structural case for support as investors bought the dip bringing it closer to the $4600 per ounce mark. The bullion early morning plunge was driven by high oil prices and inflation concerns stemming from the war with Iran.
Fears of persistent inflation have led to speculation that the Federal Reserve will leave interest rates elevated for some time. Last week, showed that two key inflation measures for April, the consumer price index and producer price index, increased sharply. The Iran conflict has resulted in the closure of shipping traffic through the Strait of Hormuz, a critical oil artery, sending oil prices soaring.
Rhetoric regarding the U.S.-Israeli war with Iran escalated Sunday, as U.S. President Donald Trump posted on social media, “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE! President DJT.”
June gold futures fell 3.6% last week to $4,561.90 an ounce on Comex, after the most-active contract declined 2.6% Friday. Bullion dropped 1% last month after sliding 11% in March and climbing 11% in February. It rallied 64% last year. The June contract is currently up $15.80 (+0.35%) an ounce to $4577.70 and the DG spot price is $4583.20.
Gold has largely fallen on hawkish news about the war, with investors turning more toward the U.S. dollar and focusing on concerns about inflation and interest rates. The dollar was up for a sixth day early Monday.
The Fed last month held interest rates steady at 3.5% to 3.75%, as expected, but policymakers were unusually divided. Almost all the investors tracked by the CME FedWatch Tool are betting on rates staying unchanged again in June. The Iran war has erased expectations that the Fed would cut interest rates this year, with more and more investors now forecasting a rate increase instead. Higher interest rates are typically bearish for gold, making it more expensive for holders of other currencies.
The Fed has kept interest rates unchanged this year after three previous rate cuts. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts in 2024.
Front-month silver futures lost 4.1% last week to settle at $77.55 an ounce on Comex after the July contract tumbled 9.1% Friday. The most-active contract touched a record above $115 in January. Silver lost 1.2% in April after dropping 20% in March and gaining 19% in February. It rose 141% last year. The July contract is currently up $0.613 (+0.79%) an ounce to $78.160 and the DG spot price is $78.25.
Spot palladium fell 4.4% last week to $1,427.00 an ounce after retreating 1.6% Friday. Palladium rose 3.2% last month after tumbling 17% in March and gaining 8.8% in February. Palladium rose 74% last year. Currently, the DG spot price is down $3.80 an ounce to $1420.50.
Spot platinum decreased 3.2% last week to $1,993.20 an ounce after dropping 3.9% Friday. It gained 1.3% in April after declining 17% in March and advancing 15% in February. Platinum increased 122% in 2025. The DG spot price is currently up $2.60 an ounce to $1993.30.
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