Gold experienced fluctuations in recent weeks influenced by US-Iran diplomatic developments and US economic data. Earlier, on June 4, 2026, gold erased its year-to-date gains, dropping as much as 3.6% to $4,315.04 an ounce. This decline was attributed to robust US jobs data in May, which surpassed all forecasts and fueled expectations that the Federal Reserve would raise interest rates. Higher interest rates typically negatively impact non-yielding assets like gold.
Hwever, by June 16, 2026, gold held gains near $4,335 an ounce, advancing over 6% in the preceding four sessions. This rebound was driven by news that the US and Iran were preparing to sign an interim peace deal, which was expected to ease global inflationary pressures. The agreement reportedly included provisions allowing Iran to immediately sell its oil and eventually access its frozen assets.
Further positive sentiment emerged earlier, on May 5, 2026, when gold and silver surged, with gold climbing as much as 3.6% to exceed $4,700 an ounce. This rally was sparked by hopes of a US-Iran deal, which drove oil prices lower and eased inflation expectations. Falling energy prices also led to lower bond yields and a weaker dollar, both favorable conditions for gold as it is priced in the greenback and pays no interest. Global equities also saw gains due to increased risk appetite amid optimism for a truce.
Conversely, geopolitical tensions and conflicting signals from the US and Iran ahead of fresh talks have also led to significant downturns. On June 22, 2026, gold slumped below $4,000 an ounce, hitting an intraday low of $3,943, the lowest since November. This represented a loss of about 25% since the war began in late February. Analyst Hebe Chen of Vantage Markets noted that while easing tensions could cool inflation, the market was prioritizing renewed US rate-hike expectations and a stronger US dollar, both of which increase the opportunity cost of holding gold. A stronger US dollar also makes gold more expensive for international buyers.
