Gold drops as tensions shift

Spot gold reversed a four-session winning streak, falling about 2.7% to $4,631.25 per ounce after earlier touching $4,800, while US gold futures dropped roughly 3.1% to $4,664.15. The decline followed remarks by US President Donald Trump that Washington would intensify military operations against Iran over the next “two to three weeks” and reiterated that the US would not allow Tehran to obtain nuclear weapons. Traders interpreted the comments as a shift toward escalation, denting hopes for near-term de-escalation and triggering profit-taking that weighed on bullion.

Other precious metals also fell, with silver plunging about 4.8% to $71.49 an ounce. Market participants said the move reflected a reassessment of safe-haven demand as geopolitical uncertainty around the Iran conflict evolved. Investors rotated out of precious metals amid the changing rhetoric, reducing the immediate appeal of non-yielding assets.

Analysts pointed to additional headwinds for gold, including a firmer US dollar and rising Treasury yields, which typically make bullion less attractive compared with yield-bearing instruments. These macroeconomic factors, combined with heightened sensitivity to political signals, have produced greater volatility in precious metals markets as traders balance conflict risk with expectations for monetary policy and economic growth.

The pullback followed an earlier run-up in prices driven by initial fears over the conflict and demand for sheltering assets. The latest comments on possible intensified military action reversed some of that risk-premium as markets reassessed the likely trajectory of hostilities and the timing of any resolution. Profit-taking and short-term technical selling contributed to the downward move, while some market participants noted that positions opened during the rally were being scaled back.

Despite the recent retreat, market observers said gold could find technical support at lower levels and may resume upward momentum if geopolitical tensions persist or escalate further. Near-term direction remains uncertain as investors monitor developments in the Middle East, central bank signals, incoming economic data, and shifts in currency and bond markets. Traders will likely keep a close watch on further political statements and military developments, which could quickly swing safe-haven flows and influence bullion prices.