TLDR
- Gold slipped beneath $5,000 per ounce, marking its third consecutive week of decline
- Crude oil climbing past $100 per barrel intensifies inflation concerns
- US-Israel military operations against Iran continue into week three
- Federal Reserve anticipated to maintain current interest rate policy
- Year-to-date gains for gold exceed 15% through 2026 despite recent pullback
US forces launched an attack on Iran’s Kharg Island oil facility during the previous weekend. Iranian countermeasures targeting Israeli positions and Gulf energy facilities drove crude prices beyond the $100 threshold.
The yellow metal declined 0.6% to approximately $4,987 per ounce during Monday’s early London session. This marks the first time the precious metal has traded beneath the psychologically important $5,000 level in recent days.
Military operations have stretched into their third week. A Trump administration official suggested hostilities could persist for four to six weeks, while diplomatic signals from both nations remain inconsistent regarding potential resolution.
Iranian forces targeted commercial shipping routes adjacent to the Strait of Hormuz during weekend operations. This critical passage handles approximately 20% of global oil and liquefied natural gas transport, with traffic now severely disrupted.
Oil prices traded above $100 per barrel with volatility throughout Monday. Elevated energy expenses amplify inflation pressure and reduce the probability of Federal Reserve interest rate reductions.
Higher borrowing costs diminish gold’s appeal to investors. The precious metal generates zero yield, making interest-bearing instruments more competitive when rates climb.
Why Gold Is Under Pressure
Market participants assign nearly zero probability to a rate reduction at the upcoming Fed meeting. This consensus represents a primary factor weighing on precious metal valuations currently.
Friday’s consumer spending report for January revealed minimal growth. Consumer confidence has declined to its lowest reading in three months, driven primarily by escalating fuel costs.
Gold maintains a year-to-date advance exceeding 15% in 2026. However, upward price action has paused while markets assess conflict developments and await potential Federal Reserve policy shifts.
Silver decreased 2.2% to $78.79 per ounce. Palladium held steady. Platinum registered modest gains. The Bloomberg Dollar Index declined 0.2% following the previous week’s 1%+ advance.
UBS Global Wealth Management released commentary Monday describing gold as a hedge against systemic economic threats rather than direct military conflicts. The institution highlighted protection against currency weakness, expanding fiscal deficits, and economic contraction—all potential consequences of extended military engagement.
What the Charts Are Saying
Technical indicators suggest additional near-term downside pressure. The precious metal breached $5,035 support during Monday trading, with analysts monitoring $4,953 as the subsequent critical threshold.
The MACD indicator has fallen below the centreline with downward momentum. Stochastic oscillator readings similarly indicate bearish short-term sentiment.
A corrective rally toward $5,200 could materialize if central bank communications this week deliver unexpectedly accommodative guidance, according to technical forecasts. Beyond that scenario, buyers would require recapture of $5,412 to confirm resumption of the established uptrend.
The Federal Reserve’s policy decision arrives this week alongside rate announcements from monetary authorities in the Eurozone, UK, Japan, Switzerland, Australia, Canada, China, Brazil, and Russia.
