LAGOS — Gold prices tumbled to a two-month low Thursday as fresh U.S. military strikes on Iran propelled the dollar higher and triggered a sharp surge in global crude oil prices.
Spot gold fell 1.5% to $4,389 per ounce, its lowest level since late March, wiped out by a rallying U.S. dollar that made greenback-priced commodities more expensive for international buyers.
The geopolitical escalation near the Strait of Hormuz simultaneously drove Brent crude futures up 3.6% toward $97 a barrel, stoking intense global fears of an energy-driven structural inflation spiral.
These compounding supply-side inflation risks have heavily clouded the Federal Reserve’s interest rate outlook, forcing policymakers to signal potential rate hikes to curb rising energy costs.
Because bullion yields no interest, the prospect of prolonged high interest rates dramatically increases the asset’s opportunity cost, prompting investors to liquidate gold positions for rising Treasury yields.
The market reaction highlights a sharp reversal from early 2026 trends, where safe-haven demand amidst Middle East tensions initially pushed gold prices to historic, record-breaking highs.
Silver prices also plummeted in tandem, dropping over 2.5% to $72.37 per ounce, reflecting a broader, systemic liquidation across precious metals as liquidity shifted rapidly into the dollar.
Market participants are now closely watching upcoming U.S. inflation data to gauge whether the Federal Reserve will officially pivot toward tighter monetary policy following the oil shock.
