Gold and Silver Pull Back as Iran War Continues, Rate Cut Hopes Extinguish

 

Gold and Silver Down on Dashed Rate Cut Hopes, Iran Oil Crisis

(Bullion News Network) – Gold and silver pulled back on Friday as the war in Iran continued, ending the week in the red as the price of oil rose. The spot price of gold shed more than $50 per troy ounce to close the trading week, logging losses on Wednesday, Thursday, and Friday. Silver charted a similar path, shedding over $2.50/ozt on Wednesday and Friday while losing more than $1.87 per troy ounce on Thursday. On the day, the price action favored gold, with the gold-silver ratio climbing by more than 1.65. The gold-silver ratio rose on each day of the trading week as silver prices pulled back. Gold appears to be the bigger safe haven play for investors, although some analysts believe the metal is underperforming, given the uncertainty caused by the war in Iran and rising oil prices, both of which are typically bullish signals for gold. Platinum took an even larger hit, shedding over $100 per troy ounce in the metal’s third consecutive loss this week.

The war in Iran continued throughout the week. Both the United States and Israel conducted a series of strikes on targets throughout the country, and American officials have suggested that the war could go on for several more weeks. Iranian leaders reinforced their intention to block trade through the vital Strait of Hormuz earlier this week. On Thursday, Iranian Supreme Leader Mojtaba Khamenei issued his first statement since being chosen for the country’s highest leadership position. Khamenei is the son of Iranian leader Ali Khamenei, who was killed in a US/Israeli strike at the end of February. Khamenei said that Iran will continue to block trade along the Strait of Hormuz, a crucial shipping route for oil and other goods.

The leverage of closing the Strait of Hormuz must definitely continue to be utilized.

Tehran told reporters earlier this week that the United States should prepare for crude oil to cost $200 per barrel or more. Over 1,000 cargo ships have already been blocked since the beginning of the war in Iran. The Strait of Hormuz is one of the world’s most crucial choke points for crude oil. An estimated 20% or more of the world’s oil supply typically crosses through the Strait of Hormuz. The United States government confirmed earlier this week that Iran had begun placing mines along the Strait of Hormuz, with U.S. President Donald Trump saying in a Truth Social post that American forces had destroyed a great number of these mines. Iran intends to continue its closure of the Strait of Hormuz, which could lead to higher crude oil prices – and rising costs at the gas pumps for Americans.

The price of crude oil jumped more than 2.5% to above $96 per barrel on Friday, although prices are down from their peak of more than $110/barrel from Monday. The International Energy Agency (IEA) proposed the release of 400 million barrels of oil on Wednesday in order to respond to rising costs, and U.S. President Donald Trump announced Thursday that he planned to release a massive 172 million barrels from an emergency reserve in the Gulf of Mexico. The moves are intended to bring oil costs and gas prices down, both domestically and around the world. Experts say that a prolonged closure of the Strait of Hormuz could pose a lasting problem for gas and oil costs, though. The price of oil tends to increase quickly but can take months or longer to return to normal rates. This is an especially significant concern as countries release emergency oil reserves in an effort to alleviate climbing prices. These oil reserves can take a considerable amount of time to replenish, and each barrel allocated to the reserves is a barrel not going to market.

Wall Street sunk on Friday, logging a new 2026 low as traders reacted to the war on Iran and the ongoing oil crisis caused by the Strait of Hormuz closure.

The year-over-year Personal Consumption Expenditures (PCE) report published on Friday saw year-over-year inflation hit a two-year high. The core PCE YoY climbed to 3.1%, its highest since March of 2026. The report, combined with better-than-expected job opening numbers released earlier on Friday, virtually guaranteed that the FOMC will opt to keep interest rates unchanged when it meets next week. CME FedWatch projected the probability of an interest rate cut at 0.9% on Friday, down from 3.5% last week and 9.2% one month ago. Safe haven assets like gold tend to thrive when interest rates are falling due to the inflationary impact of cutting rates, so the growing market expectation for a no-cut decision may have contributed to gold’s poor end to the trading week.

Next week, Wednesday’s FOMC meeting should be a big moment to watch for traders, especially in the precious metals market. Fed Chair Jerome Powell’s commentary following the rate cut decision is also slated to be a major cue about how the central bank feels about ongoing uncertainty. Aside from the FOMC meeting, traders should expect news about the Strait of Hormuz and oil prices to have an outsized impact on where precious metal prices move.