(Bloomberg) — Gold fell, pressured by strength of the US dollar and the prospect of less monetary easing as the war in Iran sent oil prices soaring.
Bullion fell as much as 2.3% on Thursday while the dollar strengthened as both US President Donald Trump and Iran’s new supreme leader, Mojtaba Khamenei, struck defiant tones on the 13th day of the war, offering little relief to energy markets.
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About two weeks into the US-Israeli war with Iran, millions of barrels remain trapped in the Persian Gulf, creating the biggest oil market disruption in history. Iran’s new supreme leader signaled no intention of ending the Strait of Hormuz closure. Meanwhile, Trump said on Truth Social that stopping Iran from having nuclear weapons is “of far greater interest and importance to me” than oil prices.
“This is too big of a story and it’s impacting global markets,” said Phil Streible, chief market strategist at Blue Line Futures of the Iran war. “If they could get oil prices heading back lower and they can get yields going back lower, I think you’ll get a relief rally across a lot of different asset classes.”
Meanwhile, the latest US jobless report showed new claims remained subdued in the latest economic data weighed by the Federal Reserve to help determine the path for interest rates. Short-dated Treasuries slid Thursday as traders ceased to fully price in a Fed rate cut in 2026. Higher borrowing costs are negative for non-yielding gold.
“It seems evident, especially in recent days, that a pause is on the horizon for the Fed,” said Daniel Ghali, senior commodity strategist at Toronto Dominion Bank. “The length of that pause is essentially the question at hand.”
Gold has advanced 17% this year, with gains underpinned by investor demand for safe havens as geopolitical tensions rise. Still, that upward momentum has stalled since the Iran war began on Feb. 28.
Spot gold fell 1.9% to $5,079.21 an ounce while silver declined 2.2% Thursday in New York. Platinum and palladium also fell. The Bloomberg Dollar Spot Index advanced 0.5%.
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