TLDR
- Bullion prices dropped more than 1% Thursday, settling between $4,688 and $4,703 per ounce
- Escalating tensions between Washington and Tehran over Hormuz Strait access pushed crude beyond $103
- Elevated energy costs are intensifying inflation concerns, weighing on assets without yields
- Dollar strength is reducing gold’s appeal to international purchasers
- Precious metals have declined approximately 11% during the eight-week confrontation
Precious metal markets experienced significant downward pressure Thursday as a combination of dollar appreciation and climbing energy costs impacted bullion valuations. Spot gold retreated approximately 1%, hovering around the $4,700 per ounce mark, with futures contracts following a similar trajectory.
The decline occurs against the backdrop of an ongoing Washington-Tehran confrontation entering its eighth week, which continues to create turbulence in global energy markets. Crude oil prices have rebounded above the $103 per barrel threshold this week, propelled by concerns surrounding potential supply chain interruptions at the critical maritime passage.
The Strait of Hormuz represents a crucial chokepoint along Iran’s southern coastline. Approximately 20% of global petroleum supplies transit through this narrow waterway.
Tehran has continued its blockade operations at the strait, while US naval forces have enforced a maritime embargo targeting Iranian vessels. This week witnessed Iranian patrol boats opening fire on merchant shipping, further escalating regional tensions.
President Trump announced an extension of the ceasefire initially established on April 7, declaring it would remain effective indefinitely pending Iran’s submission of fresh diplomatic proposals. Tehran has indicated no immediate plans to commence negotiations.
Iranian officials have stipulated that Washington must dismantle its naval blockade as a precondition for dialogue. The United States has countered by demanding complete restoration of Strait of Hormuz shipping access. The diplomatic stalemate persists.
Why Rising Oil Hurts Gold
Elevated oil prices amplify inflationary expectations throughout the economy. When inflation indicators rise, monetary authorities typically maintain elevated interest rates or implement additional increases.
Bullion generates neither interest income nor dividend payments, making it less attractive during periods of high or ascending borrowing costs. This fundamental relationship has continuously pressured gold valuations throughout the conflict.
Gold has experienced an approximately 11% valuation decline since hostilities commenced eight weeks prior.
The greenback also gained strength this week, positioning itself for its first weekly advance in a month. Dollar appreciation increases gold’s cost for purchasers transacting in alternative currencies, thereby suppressing international demand.
Jake Behan, Head of Capital Markets at Direxion, observed that certain market participants are redirecting attention from geopolitical tensions toward quarterly corporate performance reports. He highlighted renewed enthusiasm for artificial intelligence infrastructure investment as a catalyst for near-term risk tolerance.
Other Precious Metals Also Fall
Silver experienced substantial losses, declining between 2.7% and 4.3% Thursday to settle near the $74–$75 per ounce range. Platinum tumbled 3.5% to approximately $2,005 per ounce. Palladium similarly retreated.
Rhona O’Connell, head of market analysis at StoneX, indicated that precious metals markets will “remain cautious and volatile.” She noted that institutional trading firms are hesitant to establish substantial positions amid the unpredictable geopolitical landscape.
Tehran’s ongoing closure of the Strait of Hormuz combined with America’s naval deployment in the region continue to represent the primary factors maintaining elevated energy market volatility and inflation risk as of April 23, 2026.
