Gold prices slipped toward $4,700 an ounce on Monday, extending losses as escalating geopolitical tensions in the Middle East triggered sharp moves across global commodities, particularly energy markets.
The decline comes after reports that the United States is moving to enforce restrictions on maritime traffic linked to Iran following failed weekend negotiations in Pakistan between Washington and Tehran. The breakdown in talks has intensified fears of a prolonged crisis around the Strait of Hormuz, a critical chokepoint for global oil shipments.
According to market developments, the proposed restrictions would apply to vessels entering and leaving Iranian ports, further tightening already disrupted shipping lanes in the region.
The diplomatic impasse follows unsuccessful negotiations in Islamabad, where discussions reportedly collapsed over Iran’s nuclear programme, regional security demands, and access to frozen assets. The breakdown has left no clear path toward de-escalation, reinforcing expectations of continued volatility in energy markets.
Oil prices have surged above the $100-per-barrel threshold in recent trading sessions as supply risks deepen, with traders warning that a sustained disruption through Hormuz could further tighten global energy flows. The strait is a key transit route for a significant share of global crude exports.
The spike in energy prices has strengthened inflation concerns, reducing expectations of near-term interest rate cuts by major central banks. Higher inflation expectations and a stronger US dollar have, in turn, weighed on gold, which typically benefits from economic uncertainty but loses appeal in high-rate environments.
Analysts note that gold’s recent decline, now more than 10% below recent peaks, reflects shifting investor focus from safe-haven demand toward inflation-driven monetary policy risks.
Other precious metals showed mixed performance as markets reassessed global growth and inflation trajectories amid the escalating geopolitical shock.
Market participants are now watching whether diplomatic channels can reopen or whether the energy shock will deepen further, potentially reshaping global inflation and interest rate expectations in the weeks ahead.
