Gold and industrial metals decline as investors turn to US dollar amid geopolitical risks

ISTANBUL

Gold and industrial metal markets are seeing steep sell-offs amid a surging US dollar, fueled by rising oil prices over escalating geopolitical tensions in the Middle East.

Brent crude oil spiked above $80 per barrel for the first time since January 2025, following the joint US and Israeli military strikes on Iran.

The sudden energy shock accelerated global inflation concerns, prompting investors to opt for safe-haven liquidity and pushing the US Dollar Index to 99.4, hovering near its 14-week highest.

The Fed is expected to maintain its rates at the upcoming meeting due to the stronger dollar and rising bond yields, which is pressuring commodity prices this week.

Gold declined 5.1% to $4,996.5 per ounce and silver plummeted 16.8% to $78, revealing a deep vulnerability in the broader market volatility.

Industrial metals also suffered as investors avoided risky assets.

Platinum dropped 14.9% to $2,013 per ounce, palladium 10.5% to $1,601.6, and copper 5.2% to $5.7 per pound.

Gold rebounded to $5,160, silver $84.80, platinum to $2,148, and palladium to $1,689 on Wednesday’s trading sessions.

Increased cost risks in global trade

Zafer Ergezen, a futures and commodity markets analyst, told Anadolu that the sell-offs reflected deeper concerns over global economic activity, that the regional conflicts ant the threat to the Strait of Hormuz severely inflated global insurance and freight costs as shippers rerouted around the Cape of Good Hope.

“Routes are changing, ships are having to wait — all this means that global trade is facing the risk of increased costs, not only due to oil and natural gas, but also in general terms,” he said.

Ergezen stated that the rise in global trade costs triggers inflationary effects, while the rise in oil and natural gas prices raises inflation concerns.

“Central banks around the world are expected to postpone their rate cut cycles and skip rate decisions at their first meetings,” he said. “Markets increasingly expect no rate cuts.”

“We are seeing a rise in the sales of metals and commodities widely used in the industrial sectors, and in general, we see deeper sales in industrial metals, while precious metals had reached new peaks this year,” he added.

*Writing by Emir Yildirim