Gold Drops as Trump Escalates Threats

Gold remained below $4,700 an ounce on Monday following a sharp drop in the previous session, as investors assessed reports of a potential ceasefire in the Middle East. The US, Iran, and a group of regional mediators are reportedly discussing terms for a possible 45-day ceasefire that could pave the way for an end to the conflict. Meanwhile, President Donald Trump issued a fresh ultimatum to Iran, warning of strikes on its power plants and other civilian infrastructure if the Strait of Hormuz is not reopened. Tehran has rejected the latest demand and continues to target energy assets across the region. Gold remains down roughly 12% since the conflict began, as surging energy prices have fueled inflation concerns and reinforced expectations of further interest rate hikes. The metal has also struggled to act as a traditional safe haven, weighed down by forced liquidations as investors moved to cover losses in other markets.

Gold slid toward $4,600 per ounce on Monday, extending losses from the prior session after President Donald Trump issued a fresh ultimatum to Iran and warned of strikes on its power plants and other civilian infrastructure if the Strait of Hormuz is not reopened. Tehran has rejected the latest ultimatum and continues to carry out attacks on energy assets across the Middle East. Meanwhile, the US, Iran, and a group of regional mediators are reportedly discussing terms for a possible 45-day truce that could pave the way for a more permanent resolution to the conflict. Gold remains down roughly 12% since the conflict began, as surging energy prices fueled inflation concerns and strengthened expectations of interest rate hikes. The metal has also struggled to perform its traditional safe-haven role, pressured by forced liquidations as investors moved to cover losses in other markets.

Gold prices slid over 2% to around $4,677 per ounce, snapping a four-day winning streak, as the US dollar and oil prices surged following President Donald Trump’s vow to intensify attacks on Iran. His remarks, confirming the US had "nearly accomplished" its military objectives but offering no end in sight to the month-long conflict, sparked inflation fears and reinforced expectations of higher interest rates. In a Wednesday address, President Trump declared that US forces had "nearly achieved" their objectives in Iran, yet stopped short of providing a timeline for ending the month-long war, instead vowing to hit Iran "extremely hard" in the coming "two to three weeks." On the other hand, Tehran dismissed his assertion that it had sought a ceasefire, reaffirming that the Strait of Hormuz remains firmly under IRGC Navy control. The dollar’s safe-haven rally weighed on dollar-denominated gold, which has now lost 13% of its value since the conflict began on February 28.