Key Takeaways
- Precious metal prices retreated more than 1% on Thursday, with spot gold trading between $4,688 and $4,703 per ounce
- Ongoing US-Iran confrontation in the Strait of Hormuz region is propelling crude oil beyond the $103 per barrel threshold
- Escalating energy costs are amplifying concerns about rising inflation, creating downward pressure on assets without yield
- An appreciating US dollar is increasing gold’s cost for international purchasers
- Since the outbreak of hostilities eight weeks ago, gold values have declined approximately 11%
Precious metal valuations experienced a downturn on Thursday as the yellow metal faced dual headwinds from an appreciating US dollar and climbing crude oil prices. Spot gold registered approximately a 1% decrease, hovering around the $4,700 per ounce mark, with futures contracts following a similar downward trajectory.
This decline arrives as the ongoing confrontation between Washington and Tehran, now extending into its eighth week, continues to create turbulence in global energy markets. Crude oil has climbed back above the $103 per barrel level this week, propelled by mounting concerns regarding potential supply chain interruptions at the strategic Strait of Hormuz.
This critical maritime passage, located along Iran’s southern coastline, serves as a conduit for approximately 20% of global oil shipments.
Tehran has maintained its blockade of the strategic waterway, while American naval forces continue their blockade operations targeting Iranian vessels. This week witnessed additional escalation as Iranian military patrol boats opened fire on merchant ships traversing the area, maintaining elevated tension levels.
President Trump announced an extension of the ceasefire originally brokered on April 7, indicating it would remain effective indefinitely as the United States awaits Iran’s submission of a fresh peace framework. Iranian officials have indicated no immediate plans to engage in diplomatic negotiations.
Tehran’s position requires the United States to dismantle its naval blockade as a precondition for dialogue. Washington has countered by demanding complete restoration of passage through the Strait of Hormuz. The diplomatic deadlock persists with neither party showing signs of compromise.
The Connection Between Crude Prices and Precious Metals
Escalating oil prices contribute to heightened inflation forecasts. As inflationary pressures mount, monetary authorities become more inclined to maintain elevated interest rates or implement additional increases.
Because gold generates no interest income or dividend payments, it typically loses appeal when borrowing costs are elevated or trending upward. This fundamental relationship has consistently pressured bullion throughout the duration of the conflict.
Gold valuations have retreated roughly 11% since hostilities commenced two months ago.
The greenback has also gained strength this week, positioning itself for its first weekly advance in four weeks. Currency appreciation makes dollar-denominated gold more costly for purchasers using alternative currencies, consequently dampening international demand.
Jake Behan, Head of Capital Markets at Direxion, observed that certain market participants are redirecting attention from geopolitical developments toward quarterly corporate performance reports. He highlighted renewed enthusiasm for artificial intelligence infrastructure investment as a catalyst for near-term risk appetite.
Broader Precious Metals Market Experiences Declines
Silver experienced a more pronounced decline, falling between 2.7% and 4.3% on Thursday to settle around $74–$75 per ounce. Platinum registered a 3.5% decrease, trading near $2,005 per ounce. Palladium similarly posted losses.
Rhona O’Connell, head of market analysis at StoneX, indicated the precious metals sector will “remain cautious and volatile.” She noted that institutional trading firms are hesitant to establish substantial positions given the unpredictable geopolitical landscape.
Tehran’s ongoing closure of the Strait of Hormuz combined with Washington’s naval deployment in the region continue to serve as primary catalysts maintaining elevated energy market uncertainty and inflation risk as of April 23, 2026.
