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Geopolitics · Gold · Inflation · Interest Rates
Gold prices plunged nearly 3% to $4,622 on April 2, 2026, following President Trump's threat to hit Iran "extremely hard" and return it to the "stone ages," ending a four-day winning streak for the precious metal.
The threat, interpreted by analysts as a potential attack on Iranian energy facilities, fueled concerns of increased oil prices and inflation. This development diminished the likelihood of the Federal Reserve continuing to lower interest rates, traditionally beneficial for gold.
Christopher Wong, a strategist at Oversea-Chinese Banking Corp., noted that Trump's speech framed the conflict as a military success, not a ceasefire, which could curtail risk appetite. Consequently, gold's traditional safe-haven appeal was negated, forcing some investors to liquidate positions to cover equity losses.
The VanEck Gold Miners ETF (GDX) dropped over 5%, with Agnico Eagle Mines (AEM) down 4.68% and Newmont Mining (NEM) off 4.34%.
