Gold slips as dollar firms and oil rises ahead of Trump Iran decision

Gold prices edged lower on Monday, June 1, pressured by a stronger U.S. dollar and higher crude oil prices as investors waited for U.S. President Donald Trump to decide whether to support a proposed extension of the ceasefire with Iran.

Spot gold fell 0.4% to $4,518.09 an ounce by 0306 GMT, after reaching a two-week high in the previous session. U.S. gold futures for August delivery dropped 1% to $4,548.90.

The dollar’s strength made gold, which is priced in U.S. currency, more expensive for buyers using other currencies. Oil rose more than 2% in early trading, adding to market concern that higher energy costs could keep inflation pressures elevated.

Geopolitics and inflation concerns weigh on sentiment

Markets were also tracking developments in the Middle East as investors focused on Trump’s pending decision on the Iran ceasefire proposal. The prospect of renewed or prolonged conflict has supported demand for safe-haven assets at times, while day-to-day price moves have remained sensitive to the dollar and interest-rate expectations.

In a separate development, Israeli Prime Minister Benjamin Netanyahu ordered troops to move further into Lebanon in the fight against Hezbollah, despite a ceasefire announced more than six weeks earlier, according to officials cited in the original report.

Federal Reserve Vice Chair for Supervision Michelle Bowman said on Friday that the economic effects of the Middle East war were still being assessed, but could contribute to persistent inflation that might require tighter monetary policy.

Analysts point to longer-term upside under specific conditions

One analyst said gold could still reach $5,500 by the end of 2026 if favorable conditions emerge, including lower oil prices and a weaker dollar, supported by continued central bank buying and gold’s role as a hedge against geopolitical risk and inflation.

In other precious metals trading, spot silver rose 0.4% to $75.58 an ounce, platinum gained 1.1% to $1,937.30, and palladium added 1.2% to $1,370.50.

Investors will watch for any statement from Trump on the Iran proposal and for signs that energy prices are shifting inflation expectations that influence the outlook for U.S. interest rates.