Gold falls below $4,000 on Trump Iran blockade, CPI in focus

Gold fell below $4,000 an ounce on Monday after President Donald Trump announced a blockade of Iranian ports.

"The market has largely stood back from any fresh investment as uncertainty over the Iran conflict persists," said Rhona O'Connell, Head of Market Analysis for EMEA & Asia at StoneX. "Gold is fighting shy of rising rates."

Trump declared the US would reinstate its blockade of Iranian ports and charge 20 percent on all cargo traversing the Strait of Hormuz, according to a post on Truth Social. Iran's Islamic Revolutionary Guard Corps fired warning shots at two ships attempting to cross the strait. Crude oil prices, which surged from $70 to $120 a barrel after the war began, remain elevated, keeping Treasury yields and the dollar under pressure.

The break below $4,000 opens the door to a test of lower support levels, with the next catalyst being US CPI data due this week. StoneX expects gold to finish 2026 near current levels, with silver trading between $55 and $60 an ounce.

Central Bank Buying Offers a Floor

Despite the price weakness, official-sector demand remains a structural support. The World Gold Council's latest central bank survey showed 89 percent of respondents expect global gold reserves to increase over the next 12 months. Central banks have accumulated almost 4,000 tonnes over the past four years, O'Connell noted. StoneX's research on China's gold market identified a potential shortfall of roughly 4,000 tonnes when comparing mine production, recycling, consumption and official purchases over the past 11 years.

Silver traded near $72 an ounce, testing the lower end of its range. StoneX forecasts a $55-$60 range for the foreseeable future, with longer-term industrial demand from AI chips, electrification and solar expected to tighten the market over the next two to three years.

This article is for informational purposes only and does not constitute investment advice.