Gold caught between safe-haven demand, strong dollar headwinds

April 20, 2026 (MLN): Gold prices edged lower on Monday as a stronger U.S. dollar weighed on demand, even as escalating tensions in the Middle East stirred fresh inflation concerns.

Currently, spot gold is down 0.79% to $4,791.01 an ounce as of [11:04 am] PST, according to data reported by Mettis Global.

Market sentiment shifted after renewed disruptions in the Strait of Hormuz sent oil prices sharply higher.

The spike in crude revived what is described as “war trade” dynamics where geopolitical risk pushes up energy costs, fuels inflation expectations, and strengthens both the U.S. dollar and bond yields, CNBC reported.

The dollar index advanced, making gold more expensive for buyers using other currencies.

At the same time, benchmark 10-year U.S. Treasury yields climbed by 0.5%, further pressuring the appeal of non-yielding assets like gold.

Oil markets surged  6% while global equities turned volatile, as shipping activity through the Gulf dropped significantly amid rising conflict risks.

The situation intensified after the United States seized an Iranian vessel accused of breaching its blockade, prompting Tehran to warn of retaliation.

This development cast doubt over a fragile ceasefire that was expected to hold only briefly.

Iran also signaled it would not join a second round of talks proposed by Washington before the ceasefire’s scheduled expiration, adding to uncertainty in global markets.

Despite gold’s traditional role as a hedge against inflation, prices have dropped roughly 8% since late February, when U.S. and Israeli strikes on Iran first escalated tensions.

Investors appear increasingly concerned that prolonged high energy costs could keep interest rates elevated for longer, reducing gold’s attractiveness.

In other precious metals, silver slipped 0.5% to $80.36 per ounce, platinum remained largely unchanged at $2,103.38, and palladium dipped 0.1% to $1,556.45.

Copyright Mettis Link News