Gold hits two-week low after tensions rise between Iran and U.S.

Gold falls to two-week low as U.S.-Iran tensions escalate

The spot price of gold fell 0.8% to $4,417.04 per ounce on Monday as military tensions between the United States and Iran escalated again. Gold reached its lowest level in nearly two weeks, while developments in the region also affected oil prices and interest-rate expectations.

Scraper SystemAugust 31, 2026, 01:13 PM

Gold falls to two-week low as U.S.-Iran tensions escalate

Renewed military tensions between the United States and Iran in the Middle East drove gold prices lower on Monday. The spot price of gold fell 0.8% to $4,417.04 per ounce, reaching its lowest level in nearly two weeks.

The precious metal's price thus fell to its weakest level since August 19. In morning trading, gold fluctuated between $4,396 and $4,472 per ounce, while its daily loss ranged from 0.3% to 0.8% compared with the previous session's close.

U.S. gold futures also declined. The contracts fell 1.4% to approximately $4,466.80.

Regional escalation affects oil prices and interest-rate expectations

Developments following a U.S. attack on Lark Island near the Strait of Hormuz were considered a factor in gold's decline. Following the attack, Iran carried out missile and drone strikes on sites in Jordan and the United Arab Emirates that it identified as hosting U.S. bases.

Rising tensions in the region caused oil prices to increase by approximately 4% in some trading sessions, pushing them above $90 per barrel. The move strengthened expectations that inflationary pressures could persist.

Federal Reserve Chair Kevin Warsh's indication that an interest-rate hike might be necessary to ease price pressures also reduced gold's appeal. The precious metal, which does not provide interest income, was negatively affected by expectations of higher interest rates.

Iran, UAE and Jordan issue differing statements

Iran said on Monday morning that it had carried out missile and drone strikes on positions in the United Arab Emirates and Jordan that it claimed belonged to U.S. forces. Tehran said the attacks were in response to an operation carried out by the United States and Israel near Lark Island.

The United Arab Emirates denied claims that an air base in the country had been hit by missiles, saying that an Iranian drone had been intercepted. Jordan's army announced that eight missiles had been intercepted and destroyed without specifying their origin or targets.

Iran's Islamic Revolutionary Guard Corps said on Sunday that the U.S. military's attack on Lark Island had caused deaths and injuries, including among civilians, and announced that a response would follow.

Washington-Tehran talks disrupted by dispute over the Strait of Hormuz

According to Iran's statement, attacks by the United States and Israel on Iran on February 28 caused more than 3,000 deaths. Tehran also said that U.S. and Israeli citizens had been killed in the attacks it carried out in response.

Washington and Tehran began negotiations after signing a memorandum of understanding on June 18. However, a dispute over maritime traffic in the Strait of Hormuz, which is strategically important for energy and goods shipments, disrupted the talks.

Gold falls to two-week low as U.S.-Iran tensions escalate