Gold slips to $4,354 on Middle East tensions, rate outlook
Gold prices fell 0.5% to $4,354.30 per ounce on Monday as geopolitical tensions in the Middle East and shifting rate expectations weighed on demand.
Source: The Star · September 21, 2026 at 9:02 AM · AI-assisted report
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KUALA LUMPUR, 21 SEPTEMBER 2026 —
Gold prices fell 0.5% to $4,354.30 per ounce on Monday as geopolitical tensions in the Middle East and shifting rate expectations weighed on demand.
Market Impact
The decline came amid escalating threats between Iran and the US, with President Donald Trump warning of economic collapse or leadership elimination for Tehran unless it engages in negotiations. Iran’s military responded by vowing harsh retaliation against any new attacks. Spot gold had reached a one-week high of $4,476.50 on Friday before retreating.
US gold futures for June delivery also dropped 0.8% to $4,391.50, reflecting broader market caution. Tim Waterer, chief market analyst at KCM Trade, noted that gold’s near-term outlook hinges on oil prices and bond yields. "For gold to gain meaningful upside traction, a clear move lower in oil and/or bond yields is likely required," he said, adding that the metal may trade within a $4,200 to $4,580 range in the coming weeks.
The sell-off aligns with rising expectations of further global rate hikes, as central banks signal tighter monetary policy to combat inflation stoked by regional conflicts. The Bank of Japan raised rates on Friday, following moves by the Federal Reserve and European Central Bank earlier this month. Higher borrowing costs typically reduce demand for non-yielding assets like gold, despite its traditional role as an inflation hedge.
Standard Chartered analysts, however, highlighted sustained support from official-sector demand, though they cautioned that price gains would likely remain modest. Meanwhile, oil prices eased on hopes of a diplomatic resolution to the Iran conflict, alongside expectations of a partial recovery in Saudi Arabian crude shipments.
Silver and platinum followed gold’s lead, dropping 0.3% to $66.04 and 0.2% to $1,800.53, respectively, while palladium bucked the trend with a 0.8% gain to $1,313.15. The broader metals complex reflects the tension between safe-haven demand and the drag from tighter financial conditions.