Gotrade News - Spot gold fell 1.94% to USD 4,524.11 per troy ounce on Monday, May 4, marking its lowest level in over a month. The drop followed a fresh escalation of conflict between the United States and Iran in the Middle East.
A stronger US dollar added pressure on the greenback-denominated commodity. Renewed inflation concerns also tempered expectations for any near-term Federal Reserve rate cuts.
Key Takeaways
- Spot gold dropped to USD 4,524, lowest since March 30
- US-Iran clash in Strait of Hormuz pushed energy prices up over 5%
- TD Securities' Bart Melek flags USD 4,200 per ounce as critical support
Iran reportedly attacked vessels in the Strait of Hormuz and burned an oil port in the United Arab Emirates. The incident represents the largest escalation since a ceasefire announced four weeks earlier.
Bart Melek, Global Head of Commodity Strategy at TD Securities, said recent developments offer little confidence to markets. He identified USD 4,200 per ounce as a critical support level for gold.
June gold futures also fell 2.4% to USD 4,533.30 per ounce. Other precious metals followed, with silver down 3.5% and platinum off 2.2%.
Major gold miners including Newmont (NEM) and Agnico Eagle (AEM) typically track sensitivity to bullion price swings. Investors also watch the VanEck Gold Miners ETF (GDX) and the SPDR Gold Shares (GLD) for sector and bullion exposure.
Barclays projects the Federal Reserve will hold rates steady throughout 2026. Higher-for-longer rates erode gold's appeal because the metal pays no yield to investors.
Markets are still digesting the implications of tighter monetary policy than previously expected. Traders are watching whether further geopolitical escalation can flip the current risk-off positioning this week.
