Gold Down, Silver Up as Oil Retreats on US-Iran Negotiations

 

Gold Down, Silver Up as Oil Retreats on US-Iran Negotiation News

(Bullion News Network) – The price of gold pulled back on Monday, briefly falling to its lowest price of 2026 in the early-morning trading hours before paring its losses later in the day. The spot price of gold is set to close approximately $80 lower than its Friday closing price at just over $4,415 per troy ounce. Silver prices moved in an opposite direction, with the precious metal adding nearly $1.50 per troy ounce to its spot price but settling below $69.50/ozt. The price action strongly favored silver, driving the gold-silver ratio more than three points lower to approximately 63.7:1. The spot price of platinum retreated by more than $45/ozt, while palladium prices climbed by over $28 per troy ounce. 

On Wall Street, markets surged on a relief rally after U.S. President Donald Trump suggested that the United States and Iran were engaged in negotiations. The price of oil retreated by nearly 10% on Monday, largely on hopes that the Trump administration will secure an agreement for Iran to reopen the Strait of Hormuz, a vital oil trade chokepoint that was effectively closed to the U.S. and its allies at the onset of the war. Gold moved opposite to Wall Street to open the trading week, shedding more than $80 per troy ounce. Early on Monday morning, gold briefly logged its lowest price of 2026, falling below $4,300 per troy ounce as oil prices retreated. This was gold’s ninth consecutive daily loss.

Over the weekend, the price of oil rose to more than $110 per barrel. The spike in oil prices came after U.S. President Donald Trump threatened in a Truth Social post to conduct military strikes on Iranian power plants if the country fails to reopen the Strait of Hormuz.

If Iran doesn’t FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!

Oil prices jumped on the statement, with fears of further escalation in the war with Iran sending the price of crude oil to a recent high of more than $110 per barrel. Early Monday morning, Trump extended the deadline, claiming that Iran and the United States had made progress on a deal to end hostilities in the region.

I AM PLEASED TO REPORT THAT THE UNITED STATES OF AMERICA, AND THE COUNTRY OF IRAN, HAVE HAD, OVER THE LAST TWO DAYS, VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST […] I HAVE INSTRCUTRED THE DEPARTMENT OF WAR TO POSTPONE ANY ANA ALL MILITARY STRIKES AGAINST IRANIAN POWER PLANTS AND ENERGY INFRASTRUCTURE FOR A FIVE DAY PERIOD.

The details of these negotiations are not yet clear, and the Iran Foreign Ministry denied that talks with the United States had occurred. Still, oil prices retreated on the suggestion that an end to hostilities between the U.S. and Iran may be on the horizon. Gold hit a yearly low overnight on Trump’s initial threat but regained some ground after the U.S. leader said that the two countries are in active peace talks. Gold pared some of its losses throughout Monday morning, closing the day down just over $81/0zt compared to Friday’s closing price. Silver also reversed course after Trump’s comments, treading positive ground by Monday afternoon and closing up around $1.50 per troy ounce at approximately $69.50/ozt.

Expectations for the FOMC’s next policy meeting continued to fluctuate on Monday. By Monday evening, CME FedWatch’s projected probability that the Federal Reserve will leave rates unchanged at its April meeting was 92.8%, up from 87.6% on Friday and down from 96% last Monday. More notable to safe haven asset traders is the projected likelihood that the FOMC will raise interest rates, which last occurred in July of 2023. CME FedWatch projects a probability of 7.2% that the FOMC will vote to hike rates, down from 12.4% on Friday and up from 0% one week ago. At a press conference following the FOMC’s March meeting, Fed Chair Jerome Powell said that the committee believes the war in Iran could have an impact on U.S. inflation, complicating the interest rate question for the FOMC.

Near-term measures of inflation expectations have risen in recent weeks, likely reflecting the substantial rise in oil prices caused by supply disruptions in the Middle East […] But the implications of events in the Middle East for the U.S. economy are uncertain. In the near term, higher energy prices will push up overall inflation, but it is too soon to know the scope and duration of the potential effects on the economy.

This week, traders will be able to review speeches from multiple Federal Reserve officials, including Austan Goolsbee, Stephen Miran, Michael Barr, Lisa Cook, Philip Jefferson, Anna Paulson, and Tom Barkin. For the precious metals market, developments in the US-Iran war, as well as rate cut speculation, are slated to remain major price drivers. In particular, talks surrounding the reopening of the Strait of Hormuz could be highly impactful to all markets.