Gold falls as Trump Hormuz blockade lifts oil and dollar

Monday 13 April 2026 - 10:40

By: Dakir Madiha

Gold falls as Trump Hormuz blockade lifts oil and dollar

Gold prices dropped in early Asian trading after Donald Trump ordered a naval blockade of the Strait of Hormuz, triggering a surge in oil prices and strengthening the US dollar.

The decline followed Trump’s announcement that the US Navy would immediately block vessels entering or leaving the strategic passage. The move came after more than 21 hours of failed negotiations between US Vice President J.D. Vance and Iranian officials in Islamabad. United States Central Command said the blockade would take effect Monday at 10 a.m. Eastern Time, targeting maritime traffic linked to Iranian ports.

Energy markets reacted sharply. Brent crude rose about 8 percent, while West Texas Intermediate climbed to around $105 per barrel. European natural gas futures surged as much as 18 percent. At the same time, the US dollar index gained roughly 0.5 percent, reaching its highest level in a week, as investors moved toward safe haven assets, according to Reuters.

Analysts said the combination of higher energy prices and a stronger dollar has created an inflation and interest rate feedback loop that weighs on gold. Rising oil costs increase inflation expectations, reducing the likelihood of interest rate cuts by the Federal Reserve. This removes a key support factor for gold, which does not generate yield.

Bond markets have largely priced out rate cuts for 2026, with some investors now anticipating a possible increase before the end of the year, according to CNBC.

Gold closed Friday near $4,751 per ounce, already down more than 15 percent from its January record of $5,608. Technical analysts identified $4,660 as a key support level. A break below that threshold could push prices toward the $4,541 to $4,601 range, Reuters reported.

The pressure extends across the precious metals sector. Silver, platinum, and palladium have all declined since the conflict began, driven by the same inflation dynamics and weaker industrial demand expectations in a slowing global economy.

Market volatility has intensified in recent weeks. Gold briefly fell below $4,100 in late March before rebounding above $4,700 on hopes of a ceasefire, which have since faded.

Meanwhile, Iran’s Revolutionary Guard warned that any military vessel approaching the strait would violate the ceasefire and face a decisive response, raising the risk of direct confrontation and further instability in global markets.