Gold plunges 5%, silver drops as Trump’s Iran pause cools safe-haven demand

Gold, platinum and palladium sink as Trump halts Iran strikes and risk trade returns

• Gold, silver, platinum plunged, then rebounded Monday
• Trump paused US strikes on Iran after "productive" talks
• Dow futures jumped, oil prices dropped amid easing tensions

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Gold, silver and platinum prices fell sharply on Monday before recovering from early losses, after US President Donald Trump said Washington would postpone planned strikes on Iranian energy infrastructure following what he described as “good and productive” talks with Tehran.

Spot gold dropped more than 5% in early trade to $4,262.50 before recovering to $4,412 by 11:40 a.m. in London (7:40 a.m. ET). Gold futures were last seen around 4% lower at $4,392, after earlier declining nearly 10%.

The move extended across precious metals. Platinum futures fell 9.7% to $1,780.20, while palladium dropped 4.7% to $1,377.50.

Trump announcement triggers market whipsaw

The sharp price swings followed Trump’s statement that the US would pause strikes on Iranian energy infrastructure for five days, citing progress in ongoing discussions aimed at resolving tensions.

The announcement came after days of escalation between the US and Iran, including warnings from Washington over the reopening of the Strait of Hormuz and counter-threats from Tehran targeting US-linked infrastructure.

Safe-haven demand shifts amid rate concerns

The pullback in gold, typically viewed as a safe-haven asset during periods of geopolitical uncertainty, coincided with broader market positioning linked to inflation and interest rate expectations.

Market strategists told CNBC that the risk of higher interest rates, driven by rising energy prices linked to the conflict, could support demand for government bonds while weighing on non-yielding assets such as gold.

Market reacts quick 

Dow Jones Industrial Average futures rose 1,100 points, or 2.6 percent. S&P 500 futures gained 2.7 percent, while Nasdaq-100 futures advanced 2.7 percent.

At the same time, crude oil prices declined sharply. West Texas Intermediate futures fell more than 9 percent to below $90 per barrel, while Brent crude dropped over 13 percent to below $97.

Recent escalation has driven volatility across markets

In recent weeks, escalating tensions in West Asia have led to sharp movements across commodities, equities and bond markets, with oil prices rising on supply concerns and safe-haven demand initially supporting gold.

Monday’s price action reflected a reversal of that trend, as hopes of a pause in hostilities prompted a shift in investor positioning across global markets.