Gold futures kept tumbling Monday despite President Trump’s halt on military strikes against Iran as investors continued to fret that the conflict could stall interest-rate cuts.
Though Trump on Monday announced a five-day pause on plans to strike Iranian power plants following “productive” talks, gold futures on Monday dipped as low as $4,126 an ounce – their lowest price of 2026.
By approximately 1:10 p.m. ET, gold futures were down 3.7% to $4,406.30 an ounce while silver futures traded roughly flat at $69.69.
After issuing the five-day pause, Trump said Monday that Iran and the US are going to speak “today,” and that if talks don’t go well, “we’ll just keep bombing our little hearts out.”
“The move back up in the latest trading may indicate a closer look at the conditionality of the president’s statement, and that, as he posted, we might just continue to ‘bomb our hearts out,’” Kenin Spivak, chairman and CEO of SMI Group, told The Post.
Precious metals, typically seen as safe-haven assets versus the US dollar, have rallied over the past year on hopes for rate cuts by the Fed. But Iran’s blockade of the Strait of Hormuz prolongs the worst-ever energy supply disruption and raises fears that inflation will keep rates higher for longer.
As a result, the dollar has lately rebounded while gold and silver have tanked. Federal Reserve Bank of Chicago President Austan Goolsbee said Monday that he could even see “circumstances where we would need to raise rates” if inflation gets out of control.
“Gold and silver did not sell off because anyone stopped believing in them as assets. They sold off because the war broke the rate cut thesis,” Tracy Shuchart, senior economist at NinjaTrader, told The Post.
“The Hormuz crisis had been feeding directly into inflation expectations, pushing back rate cut pricing, strengthening the dollar and crushing leveraged paper gold positions.”
The Federal Reserve last week kept interest rates unchanged in the 3.5% to 3.75% range, and forecast just one rate cut in 2026 – a bad sign for metals, which typically surge when rates are lowered.
Markets dropped the odds of a rate cut next month down to zero, even pricing in a 10% chance of a rate hike, according to CME FedWatch, which tracks Fed Funds futures.
Oil prices fell below $100 a barrel Monday after Trump announced the five-day pause, but significant attacks on Middle East energy infrastructure could keep oil, natural gas and gasoline prices higher for longer even if the war ends soon, since it will take time to repair damages.
“Investors should brace themselves for ongoing volatility as the situation plays out,” Dave Sekera, chief US market strategist at Morningstar, said in a note Monday.
“I think this reiterates why an investor should have a long-term mindset,” he added.
Meanwhile, a historic metals rally earlier this year saw gold peak above $5,600 and silver notch a recent high of about $120.
Recent declines in gold and silver represent a stark contrast compared to 2022, when gold jumped to a one-year high following Russia’s invasion of Ukraine.
Even gold’s historic rally earlier this year was partially driven by the US capture of Venezuelan dictator Nicolás Maduro, as well as fears over tariffs.
“Precious metal pricing during the Iran conflict has defied normal rules,” Spivak told The Post.
“It seems that a short war has been baked into expectations from the start, mitigating the usual gyrations. A strong dollar and interest rate expectations also played into unusual trading,” he continued.
