Gold prices experienced a sharp fall at the start of the week, dropping enough to wipe out their gains for the year. The decline comes amid growing concerns that inflation linked to the ongoing Iran conflict could lead to prolonged high interest rates.
Although geopolitical risks typically support gold, investors are currently prioritizing the potential economic fallout of the crisis. Rising energy prices due to tensions in the Strait of Hormuz have raised fears of persistent inflation, which could prompt central banks to delay or reconsider rate cuts.
Over the weekend, US President Donald Trump warned of possible strikes on Iran’s infrastructure if key shipping routes are not reopened. Iran has responded with threats of counterattacks, adding to global uncertainty.
Despite these developments, gold has struggled to attract safe-haven demand. Other metals, including silver and platinum, also recorded losses, highlighting a broader shift in investor sentiment toward monetary policy concerns rather than geopolitical risk.
