Gold Tumbles Over $100 as Iran War Fans Inflation Fears

Gold shed more than $100 in intraday trading Tuesday, sliding from an opening of $4,842 per troy ounce to a session low near $4,700, as a surging U.S. dollar and mounting inflation anxieties tied to the ongoing Iran conflict weighed heavily on the precious metal. The selloff underscored a growing tension at the heart of the gold trade: the same geopolitical crisis that initially drove investors into bullion is now threatening to trigger the very monetary tightening that makes gold less attractive.

Gold futures slipped to $4,801.80 as of 6:40 a.m. ET, with traders citing the strengthening U.S. Dollar Index as a key headwind. Silver also pulled back, with May futures falling to $78.96 per ounce. "With the U.S. Dollar Index showing impressive gains early today," Yahoo Finance reported, "it's unclear how much longer gold will hold above the $4,800 threshold." By mid-morning, it had broken convincingly below that level.

The macroeconomic backdrop is increasingly complicated. Trading Economics noted Tuesday that gold held below $4,800 as investors awaited a second round of U.S.-Iran negotiations in Pakistan before the two-week ceasefire expires later this week. President Trump has stated he will not extend the truce absent a deal, and that the Strait of Hormuz will remain closed until an agreement is secured. That closure has triggered what Trading Economics described as "a historic energy supply shock" one that has heightened inflation risks and raised the probability of central bank rate hikes. Higher rates are a classic suppressant of gold prices because they increase the opportunity cost of holding a non-yielding asset. The precious metal is now down more than 8% from its peak since the Iran war began.

Gold was trading at $4,763 per ounce as of 9:15 a.m. ET a $41 decline from the same hour on Monday though intraday swings pushed the range considerably wider. The publication noted that gold prices have nonetheless climbed more than 25% since the start of 2025, driven by persistent inflation and economic uncertainty, making even a $100 single-session drop look modest in historical context. On a year-over-year basis, the metal remains roughly 43% higher.

The week ahead is data-heavy, which may amplify volatility. There are several upcoming catalysts: ADP employment data on Tuesday, initial jobless claims and April PMI figures on Thursday, and the University of Michigan's April inflation expectations report on Friday. Any upside surprise in inflation readings could deepen gold's pullback by reinforcing the case for the Federal Reserve to hold or raise rates. CME Group data put the probability of rates staying at 3.50-3.75% in April at 99.5%, suggesting the market sees little near-term relief from monetary policy.

Longer-term, institutional forecasts remain broadly bullish. JPMorgan and Goldman Sachs expect gold to fluctuate between $4,000 and $6,300 through 2026, supported by continued central bank accumulation and unresolved geopolitical uncertainty. Central bank demand, while slowing in early 2026 relative to last year's monthly average of 27 tones, has broadened geographically, with Malaysia, South Korea, and China all

actively building reserves. That structural demand provides a floor that many analysts believe will limit any sustained bear run.

For now, however, the immediate picture is one of pressure. A stronger dollar, inflation-driven rate-hike fears, and a diplomatic calendar that could resolve or dramatically worsen the Middle East conflict within days are conspiring to keep traders on edge. Whether Tuesday's drop proves a buying opportunity or the beginning of a deeper correction may hinge on what emerges from the Islamabad negotiating table before the week is out.0

Wishing you as always good trading,