TLDR
- Gold fell over 1% on Friday, hovering near one-month lows
- The US-Iran conflict has pushed gold down around 13% since late February
- Central banks including the Fed, ECB, and Bank of England signaled possible rate hikes
- Iran’s Supreme Leader said Tehran will keep control of the Strait of Hormuz
- Analysts remain bullish on gold medium-term despite near-term selling pressure
Gold prices dropped on Friday, continuing a rough stretch for the precious metal. Spot gold fell as much as 1.2% to around $4,570 an ounce, staying close to its lowest level in a month.
The decline comes after gold lost roughly 1% in April and nearly 12% in March. Since the US-Iran conflict began in late February, gold has shed around 13% of its value.
The Iran war has sent oil prices higher, raising inflation concerns across major economies. That energy-driven inflation has shifted trader focus toward the dollar and away from gold.
The US dollar has been the main safe-haven trade since the conflict began, pushing gold out of that role it typically plays during times of global tension.
Central Banks Signal Higher Rates
Federal Reserve policymakers raised alarms this week about energy-driven inflation. The European Central Bank, Bank of England, and Bank of Japan all hinted at potential rate hikes in the near term.
Higher interest rates are bad for gold. They raise the cost of holding a non-yielding asset like bullion, making bonds and cash more attractive by comparison.
Citigroup analysts wrote in a note that selling pressure on gold could remain strong in the very near term due to Middle East uncertainty.
Gold did gain on Thursday after the Japanese yen surged, reportedly due to government intervention. A weaker dollar tends to push gold prices higher since the metal is priced in US currency.
Iran Digs In on Hormuz
US President Donald Trump said he would maintain a naval blockade on Iran and was briefed by military commanders on further options. Peace talks between Washington and Tehran have so far gone nowhere.
🚨🇺🇸🇮🇷 CENTCOM Commander Brad Cooper just reportedly briefed Trump in the Situation Room on the potential "final blow" to Iran…
Per Fox News, the briefing covered strikes on remaining Iranian military assets, leadership, and infrastructure.
Three target categories that,… https://t.co/F32UwfKqfh pic.twitter.com/clvbbU9Pza
— Mario Nawfal (@MarioNawfal) May 1, 2026
Iran’s Supreme Leader Mojtaba Khamenei issued a statement Thursday saying Iran would keep control of the Strait of Hormuz. He also said Tehran would protect its nuclear and missile interests.
Khamenei said Iran’s control of Hormuz would bring stability and economic benefits to Gulf nations. His statement followed reports that Trump rejected an Iranian proposal to reopen the waterway.
Iran has effectively blocked the Strait of Hormuz since the conflict began in late February. The strait is a critical route for global oil shipments.
Trading volumes on Friday were lower than usual, with market holidays across most of Asia keeping activity muted.
Silver rose about 1.4% to $74.10 an ounce. Platinum and palladium also edged slightly higher.
Despite near-term pressure, most analysts remain bullish on gold. The World Gold Council’s latest data showed central banks added to gold holdings in Q1 at the fastest pace in over a year.
JPMorgan’s head of precious metals research Greg Shearer said retail buying in China had helped support prices, and that central bank accumulation remained intact.
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