Gold extended a decline after Israel said it struck Iranian targets in response to missile attacks by Tehran, threatening a fragile ceasefire in the Middle East.
Bullion fell as much as 0.7% to near $4,300 an ounce, having given up nearly 5% last week during the worst flare-up in regional hostilities since a ceasefire was agreed in early April. The fighting escalated on Monday, with the Israel Defense Forces saying it hit military targets in western and central Iran after intercepting missiles fired by Tehran.
The latest strikes came despite President Donald Trump’s call for Israel to refrain from escalation as the US leader pursued a negotiated solution to the conflict. A military adviser to Iran’s supreme leader said the country’s missile launch toward Israel on Sunday was a “warning” to cease attacks in Lebanon, a side-conflict that has been a sticking point in negotiations for a wider agreement between Washington and Tehran.
Now in its fourth month, the war has disrupted energy flows via the Strait of Hormuz, driven oil prices higher and raised concerns about global inflation, making central banks more likely to keep interest rates steady or raise them — a headwind for precious metals.
Key issues concerning the conflict in the Middle East remain “unresolved,” Rhona O’Connell, head of market analysis at StoneX Group Inc., said in a note. “Our belief in a downward bias is, so far, being vindicated, but we are keeping our eyes open for any bargain hunting.”
On Friday, bullion erased its year-to-date gain after robust US jobs data fueled bets that the Federal Reserve would raise borrowing costs in 2026. Bond yields and the US dollar climbed after jobs growth topped all forecasts in May, weighing on gold that’s priced in the US currency.
Traders were also assessing another around of gold purchases by the People’s Bank of China, which added around 10 tons to its reserves last month. That was the highest monthly total since 2024 and extends the Chinese central bank’s buying streak to 19 months, underscoring continued interest from one of the world’s biggest purchasers.
Gold fell 0.5% to $4,308.51 an ounce as of 10:38 a.m. in Singapore. Silver declined 0.4% to $67.53 an ounce, after falling nearly 10% last week. Platinum also slipped, while palladium was little changed. The Bloomberg Dollar Spot Index, a gauge of the US currency, was steady after gaining 1.1% last week.
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