Metals Down as US-Iran Tensions Flare

 

Gold and Silver Down as US-Iran Tensions Flare

(Bullion News Network) – Gold and silver prices retreated on Monday as tensions flared up between the U.S. and Iran along the Strait of Hormuz. The spot price of gold shed nearly $90 per troy ounce. Silver prices pulled back by more than $2.50 per troy ounce. The price action favored gold, driving the gold-silver ratio more than 1.5% higher.

Iranian state media claimed on Monday that Iranian missiles struck a United States vessel. U.S. Central Command rejected the claim in an X post.

No U.S. Navy ships have been struck. U.S. forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports.

Later that day, U.S. President Donald Trump claimed in a Truth Social post that the U.S. destroyed seven Iranian votes that had taken shots at nations uninvolved with the US-Iran conflict.

Iran has taken some shots at unrelated Nations with respect to the Ship Movement, PROJECT FREEDOM, including a South Korean Cargo Ship. Perhaps it’s time for South Korea to come and join the mission! We’ve shot down seven small Boats or, as they like to call them, “fast” Boats. It’s all they have left. Other than the South Korean Ship, there has been, at this moment, no damage going through the Strait.

Oil prices shot up on Monday as the U.S. and Iran exchanged shots in and around the Strait of Hormuz, a vital chokepoint for crude oil that shut down after the U.S. and Israel began striking Iranian targets in late February. Wall Street tumbled on Monday’s escalations, which could pose a threat to the shaky ceasefire between the U.S. and Iran. The Dow lost 550 points as the price of crude oil rose above $105 per barrel.

Analysts say that the exchange could pose a major threat to the US-Iran ceasefire. Complicating matters even more for the United States, the Trump administration has claimed that the ceasefire constituted a cessation of hostilities, which the War Powers Act specifies must occur within 60 days of a conflict unless Congressional approval is secured by a sitting president.

These rising tensions will likely have an outsized impact on how precious metals move throughout the week.

Domestically, traders will hear from several Federal Reserve officials this week. Notable speeches include New York Fed President John Williams, Fed Vice Chair for Supervision Michelle Bowman, Fed Governor Michael Barr, St. Louis Fed President Alberty Musalem, among others. On Friday, the April U.S. employment report will become available.

The April employment report could play a key role in the FOMC’s read on the U.S. economy heading into a crucial meeting in June. June’s meeting will likely be the first with Kevin Warsh as chair of the Federal Reserve. Warsh faces a uniquely divided FOMC; the committee saw four dissenting votes for the first time since 1992 at its April meeting.

In summary, both speculation surrounding the upcoming April employment report and developments in an increasingly shaky ceasefire in the Middle East could impact gold and silver prices heading into the rest of the week.