Gold and Silver Prices Weaken Amid War Threats and Interest Rate Pressures
Global gold prices moved slightly lower amid uncertainties over the US-Iran conflict, as well as pressure from expectations of high interest rates that are eroding the appeal of this precious metal.
Citing Reuters, at the close of trading on Monday (6/4/2026) local time or Tuesday (7/4/2026) morning WIB, the spot gold price fell 0.4% to $4,654.99 per ounce, equivalent to approximately Rp76,807,335 per ounce (exchange rate Rp16,500).
Meanwhile, US gold futures contracts closed slightly higher by 0.1% at $4,684.70 per ounce, or about Rp77,297,550 per ounce.
This weakening occurred as investors held positions and monitored developments in geopolitical conflicts, particularly ahead of the deadline for reopening the Strait of Hormuz, a vital route for global oil trade.
On the other hand, US President Donald Trump threatened to “rain hell” on Tehran if no agreement is reached by Tuesday’s deadline.
This situation has left the market in a wait-and-see mode, while assessing the potential ongoing impact on energy prices and global inflation.
Head of global commodities strategy at TD Securities, Bart Melek, said market participants’ attention is not only on the conflict but also on the direction of interest rate policy, which are interconnected.
“Market focus will likely remain on the war and interest rates. If the conflict drags on, oil prices will continue to rise due to tightening supply, adding inflationary pressure,” Melek stated.
He explained that rising energy prices could narrow the room for manoeuvre for central banks, particularly the Federal Reserve (The Fed), in easing monetary policy.
“This leaves central banks with less room to cut interest rates and could even reignite discussions on rate hikes if energy prices keep rising, which negatively impacts gold,” he continued.
In normal situations, gold is often sought as a hedge or safe-haven asset during heightened uncertainty. However, gold’s lack of yield makes it less competitive when interest rates are high, so investor interest tends to shift to interest-bearing instruments.
Besides geopolitical factors, market participants are also awaiting several US economic data releases this week, such as the March Fed policy meeting minutes, Personal Consumption Expenditures (PCE) data, and the consumer price index (CPI).
The US central bank maintained interest rates last month. The majority of market participants even expect no rate cuts throughout this year, based on the CME’s FedWatch tool.
Pressure is also evident in other precious metals. Silver prices fell 0.3% to $72.81 per ounce, or about Rp1,201,365 per ounce; platinum dropped 0.6% to $1,976.21 per ounce, or approximately Rp32,607,465 per ounce; and palladium slid 1.1% to $1,487.22 per ounce, or about Rp24,539,130 per ounce.