Iran War Is Doing a Number on Gold Prices

Gold just notched a milestone no investor wanted: its steepest weekly drop since 1983. The metal slid 11% over the past week and is now down more than 14% since the war with Iran began—despite its reputation as a go-to refuge in times of turmoil, reports CNN. The conflict has pushed up energy prices and stoked inflation worries, but it's also reshaping expectations for interest rates and currencies in ways that are undercutting gold. With the Federal Reserve now expected to keep rates on hold rather than cut further, yields on bonds look more attractive—bad news for an asset that pays no income.

"Despite being a hedge against uncertainty and inflation, gold often loses appeal in a higher rate environment as rising yields raise the opportunity cost of holding the metal," explains CNBC. A stronger dollar, up nearly 2% since the war started, is also weighing on gold by making it pricier for overseas buyers. After a blistering run that saw prices hit $5,000 an ounce in January and surge 64% in 2025, momentum has flipped, with the price hovering around $4,450 on Friday. Still, some on Wall Street remain bullish: Strategist Ed Yardeni is sticking, at least for now, with a year-end target as high as $6,000.