Gold and Silver Prices Rocked by War, Confidence Already Collapsed
Jakarta, CNBC Indonesia - Gold prices have been volatile following the renewed escalation of conflict in the Middle East, which has driven a sharp surge in oil prices and heightened inflation concerns.
According to Refinitiv, gold closed yesterday, Monday (20/4/2026), at US$4,819.64, down 0.18%.
Gold prices began to improve today. On Tuesday (21/4/2026) at 06.19 WIB, gold stood at US$4,825 per troy ounce, up 0.11%.
In the latest escalation, US President Donald Trump stated that the US Navy fired upon and seized an Iranian-flagged cargo ship after it ignored warnings to stop while leaving the Hormuz Strait.
Tehran has also targeted other vessels and reaffirmed control over the strait, claiming that the US blockade of Iran-related ships violates the ceasefire agreement.
Meanwhile, Trump indicated there is still a chance for a deal ahead of a new round of negotiations in Pakistan, though Iran views those prospects as very slim.
The protracted conflict has triggered historic energy supply shocks, increasing inflation risks and raising the likelihood of central banks hiking interest rates again, which pressures gold prices. Since the war started, this precious metal has still fallen nearly 10%.
“Gold prices are lower today after the US-Iran war ceasefire celebrated by markets last week appears to be collapsing,” said Ilya Spivak, head of global macro at Tastylive, quoted from Reuters.
“This revives the familiar ‘war trade’ dynamics from the start of the conflict. Crude oil prices rise, fuelling inflation expectations and boosting bond yields as well as the US dollar.” He added.
The US dollar index strengthened again, making dollar-denominated gold more expensive for holders of other currencies. The 10-year US government bond yield has risen, making gold, which offers no yield, less attractive.
Gold prices have fallen around 8% since the US and Israel launched attacks on Iran at the end of February, as concerns over higher energy prices trigger inflation and keep global interest rates elevated longer.
Although gold is known as an inflation hedge, higher interest rates suppress demand for non-yielding assets.
Meanwhile, gold demand remained sluggish during one of India’s major shopping festivals on Sunday, as record-high prices curbed jewellery purchases, offsetting a slight increase in investment demand.