Precious metals decline on inflation concerns and expectations of prolonged Fed tightening after Middle East tensions lift oil prices.
Gold prices fell sharply on Monday, dropping below the $4,000 per ounce mark as rising oil prices fueled fears of persistent inflation and a more restrictive Federal Reserve policy path. Silver also declined amid broader pressure on precious metals from higher US yields and a stronger dollar.
The sell-off follows renewed geopolitical tensions in the Middle East, particularly around the Strait of Hormuz, which drove oil prices higher. Analysts warn that sustained energy price increases could keep inflation elevated, reinforcing expectations for tighter monetary policy. Markets are now focused on upcoming US CPI data and testimony from Fed Chair Kevin Warsh this week.
A stronger-than-expected inflation print or hawkish Fed signals could further pressure gold and silver, while signs of easing price risks or a less aggressive Fed stance may help stabilize prices. The metals remain vulnerable to shifts in interest rate expectations and energy market dynamics.