Gold’s four-day winning streak ran into serious resistance on Tuesday as a strengthening United States dollar and rising Treasury yields complicated what had been a clean safe-haven story. Bullion swung between a gain of 1.1 percent and a loss of 0.8 percent in the same session, a sign that traders are no longer reading from the same page. Silver took the harder hit, falling as much as 7.1 percent before recovering some ground.
The dollar has climbed nearly 1 percent so far this week, a move that makes gold more expensive for international buyers and has historically acted as a ceiling on precious metals prices. Rising Treasury yields added to the pressure, since gold generates no interest income and tends to lose appeal when yield-bearing assets become more attractive.
War drives demand, but inflation muddies the picture
- The conflict in the Middle East had been a powerful tailwind for gold heading into the week. Bullion gained more than 3 percent over the previous four sessions as investors sought shelter from escalating hostilities. The United States continued its military offensive against Iran, while Israel announced a fresh wave of strikes targeting command infrastructure. Iran responded by attacking oil and gas facilities and signaling threats to shipping in the Strait of Hormuz.
Those developments sent energy prices sharply higher. Benchmark Brent crude topped 80 dollars a barrel on Tuesday, a move that rekindled inflation concerns in the United States and shifted expectations around Federal Reserve policy. Traders are now pricing in a rate cut no sooner than September, a later timeline than markets had previously anticipated. For gold, a prolonged period of unchanged interest rates is a meaningful headwind.
The inflation picture was already darkening before the weekend strikes. Manufacturing input prices surged in February at the fastest pace since 2022, a signal that price pressures were building independent of any geopolitical shock.
Gold is still having a remarkable year
Despite Tuesday’s turbulence, gold has climbed nearly 25 percent in 2025, a rally fueled by persistent geopolitical and trade tensions, concerns about the Federal Reserve’s institutional independence and a broader retreat from traditional reserve assets. That last dynamic, sometimes called the debasement trade, has given the multiyear rally a fresh layer of momentum.
Spot gold edged down 0.1 percent to 5,316.38 dollars an ounce in afternoon Singapore trading, after closing the prior session at its highest level in more than a month. The metal hit a record above 5,595 dollars an ounce at the end of January. Analysts at Swiss private bank Union Bancaire Privee have suggested the record remains within reach if the Middle East conflict extends for several more weeks. If the situation stabilizes, however, some of that upward momentum could fade as geopolitical risk premiums tend to be priced in quickly and then recede.
A war that is disrupting more than markets
Beyond price swings, the conflict is creating real logistical problems for the physical gold trade. The United Arab Emirates, one of the world’s most important hubs for precious metals, closed its airspace over the weekend. Several commercial airlines also suspended Gulf operations, grounding gold and silver shipments that typically travel in the cargo holds of passenger aircraft.
Trading and logistics firms said shipments to and from Dubai have been paused with no clear timeline for resumption. Land transport within the region is rarely a viable substitute, as moving high-value metals by road carries substantial security risks.
The geopolitical situation continued to develop on Tuesday when the American embassy in Riyadh came under attack from two drones, part of Iran’s broadening retaliation campaign against United States and Israeli actions. The United States signaled it would respond.
Platinum and palladium also declined on the day, following gold and silver lower as precious metals broadly struggled against the dollar’s advance.
