Gold Holds Near $5,000 as Iran War and Fed Meeting Keep Markets Cautious

Gold prices stabilized in Asian trading on Monday after briefly slipping below a key psychological level, as investors monitored developments in the escalating U.S.–Israel conflict with Iran while awaiting a crucial Federal Reserve policy meeting later this week.

By 01:47 ET (05:47 GMT), spot gold was steady at $5,016.84 per ounce, while U.S. gold futures fell 0.8% to $5,020.76 per ounce. Spot prices had earlier dropped below $5,000 per ounce before recovering slightly.

Iran conflict remains in focus

The conflict involving the United States, Israel, and Iran showed no clear signs of easing after fresh strikes over the weekend.

U.S. and Israeli forces reportedly targeted a major Iranian export terminal, triggering retaliatory missile and drone attacks from Tehran.

Oil prices remained elevated—trading well above $100 per barrel—though they trimmed some gains after U.S. President Donald Trump said discussions were underway to form a coalition aimed at reopening the Strait of Hormuz, a vital shipping route that Iran has effectively blocked.

Trump suggested that an end to the conflict could be near, but Iranian officials have repeatedly rejected such claims, signaling readiness to continue fighting.

Gold underperforms amid inflation fears

Despite heightened geopolitical tensions, gold has struggled to gain strong momentum.

Safe-haven demand for bullion has been overshadowed by concerns that rising oil prices could trigger persistent inflation, potentially forcing central banks to keep interest rates higher for longer.

Higher interest rates tend to reduce the attractiveness of gold because the metal does not provide yield.

Mixed performance across metals

Other precious metals showed mixed moves in early trading.

• Spot silver slipped 0.3% to $80.26 per ounce
• Platinum rose 1.8% to $2,064.22 per ounce

The broader metals market was also influenced by a firmer U.S. dollar, which typically weighs on commodities priced in the currency.

Federal Reserve meeting in focus

Investors are now turning their attention to the U.S. Federal Reserve’s policy meeting this week, where policymakers are widely expected to leave interest rates unchanged.

Market expectations for a pause have been reinforced by uncertainty surrounding the economic impact of the Iran conflict, particularly the risk that higher energy prices could fuel inflation.

Fed independence dispute adds uncertainty

The central bank’s independence also came into focus last week after a U.S. federal judge blocked subpoenas issued by the Department of Justice against Federal Reserve Chair Jerome Powell over alleged cost overruns.

Powell had argued that the subpoenas were an attempt to pressure the Fed into lowering interest rates. The court ruling in his favor temporarily eased concerns over political interference in monetary policy.

However, the Department of Justice has said it will appeal the decision, meaning the legal battle could ultimately reach the U.S. Supreme Court.

With geopolitical risks, inflation concerns, and central bank policy all in focus, gold markets are likely to remain volatile in the near term.