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Gold Prices Stabil Amid Iran Turmoil, Oil Declines, and Dollar Weakens

Global gold prices move steadily in Thursday's (5/21/2026) trading after being pressured down by as much as 1% earlier in the session.

This movement occurs amid falling oil prices due to uncertainty over the resolution of the US–Israel and Iran conflict, which also influences global commodity market sentiment.

Quoting Reuters, spot gold prices slightly increased by 0.1% to US$4,547.54 per ounce at 02:04 local time, after previously dropping as much as 1%. Meanwhile, US June futures for gold closed slightly weaker by 0.1% at US$4,542.50 per ounce.

On the other hand, global oil prices experienced high volatility and tended to decline after previously rising around 3%. The market remains shadowed by uncertainty over the geopolitical conflict's direction, which has yet to show signs of resolution.

"Falling oil prices and the retreat of the dollar from its six-week high should support gold in the short term, although trading will still tend to be cautious," said Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals.

He added that the dynamics of geopolitical deal negotiations, which are often inconsistent, cause market participants to adopt a more cautious stance in taking positions.

Since the conflict erupted in late February, gold prices have corrected more than 14%. The tension temporarily disrupted shipping lanes in the Strait of Hormuz, pushed energy prices higher, and sparked concerns over global inflation.

From a macroeconomic perspective, the weakening US dollar also makes gold cheaper for holders of other currencies. Meanwhile, the yield on 10-year US government bonds fell about 0.2%, reducing the opportunity cost of holding non-yielding gold.

However, pressure on gold still stems from expectations of tight monetary policy. The surge in oil prices, which could drive inflation, is expected to lead central banks, including the Federal Reserve, to hold or even raise interest rates.

"Inflation driven by rising oil prices puts pressure on central banks to maintain or increase interest rates. This presents a short-term challenge for gold," said UBS analyst Giovanni Staunovo.

Although known as an inflation hedge, gold is generally less attractive during periods of high interest rates.

According to CME FedWatch Tool, market participants now estimate a 58% chance that the Fed will raise interest rates by 25 basis points by the end of this year. This figure has increased from 48% the day before.

Meanwhile, other precious metals also moved higher. Spot silver rose 0.9% to US$76.63 per ounce, platinum gained 0.6% to US$1,962, and palladium increased 1.1% to US$1,384.50 per ounce.