Global Gold Prices Drop Amid Strengthening US Dollar and Rising Oil Prices

Gold prices fell in early trading on Monday, 1 June 2026, as the US dollar strengthened and oil prices surged. Market participants are still awaiting US President Donald Trump’s decision on extending the ceasefire proposal with Iran. According to Reuters, spot gold prices fell 0.4% to $4,518.09 per troy ounce at 03:06 GMT, after hitting a two-week high in the previous session. The decline was driven by a stronger US dollar, which makes gold more expensive for holders of other currencies and typically reduces its appeal in international markets. KCM Trade analyst Tim Waterer said rising oil prices and the lack of a US-Iran agreement have left gold prices under uncertainty. ‘Higher oil prices, coupled with the unclear US-Iran deal, have caused gold markets to move unstably at the start of the week,’ Waterer noted. However, the two countries still differ on key issues underlying the conflict. Meanwhile, geopolitical tensions in the Middle East have escalated after Israeli Prime Minister Benjamin Netanyahu ordered troops to advance further into Lebanon in operations against Iran-backed Hezbollah. The move came despite a ceasefire being announced over six weeks ago. The geopolitical situation pushed global oil prices up more than 2% in early Monday trading. Rising energy prices have reignited market concerns over inflation and the potential for prolonged high interest rates. Federal Reserve Vice Chair for Supervision Michelle Bowman stated the economic impact of the Middle East conflict is being closely monitored.