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The Strait of Hormuz Tension Returns to Cloud Global Gold Movements

Gold Focus:

Escalation of US-Iran conflict and global inflation expectations
Changes in Fed interest rate policy expectations amid US dollar weakness and hopes for peace negotiations
Tuesday, May 25, 2026 – Gold prices opened weaker at US$4,571 per troy ounce amid rising geopolitical tensions after the United States (US) launched an attack on southern Iran. The operation targeted ships suspected of laying sea mines and missile launch facilities around the strategic Strait of Hormuz route. The latest escalation triggered an increase in Brent crude oil prices, raising market concerns about global inflation risks. The rise in energy prices is seen as potentially prompting the Federal Reserve to keep interest rates high for longer.

Despite rising tensions, markets continue to monitor diplomatic opportunities between Washington and Tehran. Iran’s chief negotiator and Iran’s Foreign Minister are reported to be in Doha, Qatar, to discuss the possibility of a peace agreement with the Qatari government. Previously, President Trump stated that both countries had discussed a memorandum of understanding regarding the reopening of the Strait of Hormuz, although both sides are tempering expectations of reaching an agreement in the near future. Optimism about the negotiation process temporarily pressured the US dollar and oil prices, supporting a rebound in gold prices in the previous session.

On the monetary policy side, market participants now estimate about a 54% chance that the Fed will raise interest rates by 25 basis points in December, according to the CME FedWatch Tool. This change in expectations is quite significant compared to early in the year when the market still anticipated two rate cuts throughout 2026. Investors are also awaiting several US economic data releases this week, which are key references for the Federal Reserve.

Technically, the nearest support level for gold prices is around $4,552 to $4,534, while the nearest resistance is at $4,584 to $4,598. If selling pressure increases, deeper support is seen at $4,502, while medium-term resistance is in the $4,630 area.
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