TLDR
- Gold fell to around $4,280 an ounce after a sharp drop the previous session
- Oil prices rose after Iran’s president said the Strait of Hormuz will stay closed to free navigation
- US business activity grew at its fastest pace in more than five years
- Five-year Treasury yields rose above 5% for the first time since 2007
- Swap markets now price in at least three Fed rate hikes by April next year
Gold prices slipped lower on Thursday, extending losses from a sharp selloff the day before. Higher oil prices, a stronger dollar, and rising Treasury yields all added pressure on the metal.
Spot gold traded near $4,280 an ounce during Asian trading hours. That followed a 1.7% drop in the previous session.
Silver also fell, dropping about 0.6% to trade near $64 an ounce. Platinum and palladium moved in different directions, with platinum gaining slightly and palladium edging higher too.
Oil Prices Rise on Iran Tensions
Oil prices climbed after Iranian President Masoud Pezeshkian spoke at the United Nations. He said Iran will not allow free navigation through the Strait of Hormuz while US sanctions and a blockade remain in place.
Oil is rising as Iran says the time for negotiations is over.
Hopium for a Hormuz reopening is vanishing.
There is no deal, no Hormuz reopening, and no reason for lower oil prices.
Brace for inflation. pic.twitter.com/engvLbUr2D
— Lukas Ekwueme (@ekwufinance) September 23, 2026
Pezeshkian said Iran is willing to negotiate but will not respond to threats. He also said Iran does not want to build a nuclear weapon, though it will not give up its right to develop nuclear technology for economic use.
His comments came one day after President Donald Trump said US officials had “very good” talks with Iranian representatives at the UN summit.
Despite that positive tone, a full peace deal between the two nations still appears far off.
Gold has fallen close to 20% since the US-Iran war began in late February. Rising energy costs have been a major factor in that decline.
Strong Economic Data Pushes Yields Higher
Gold has stayed sensitive to Federal Reserve policy in recent weeks. Investors are watching whether higher energy prices will keep inflation elevated enough to force more rate increases.
Higher interest rates tend to hurt gold prices. That’s because gold does not pay interest, making it less attractive when other assets offer higher returns.
US Treasury bonds sold off sharply after stronger-than-expected economic data and a weak debt auction. Yields across most maturities climbed to their highest levels in almost two decades.
The five-year Treasury yield rose above 5% for the first time since 2007. This added more pressure on gold prices.
US business activity expanded at its fastest pace in more than five years. The S&P Global flash composite index for September climbed to 58.4, the highest reading since July 2021.
Strong demand pushed up new orders and hiring at both manufacturers and service providers across the country.
Federal Reserve Governor Michael Barr said further rate increases are likely needed. He stated this is necessary to bring inflation back down to the central bank’s 2% target.
His comments followed similar warnings from other Fed policymakers in recent days. Several officials have said inflation pressures appear to be lasting longer than expected.
Swap markets are now pricing in at least three rate hikes by April of next year. That is an increase from expectations earlier this week.
The US Dollar Index held steady after rising for four straight days. It reached its highest level in nearly two months.
For now, a mix of stronger economic data, rising yields, higher oil prices, and a firmer dollar continue to weigh on gold. Markets will keep watching upcoming Fed commentary and economic reports for further direction on interest rate policy.
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