Oil Price Plunge Sends Gold Soaring Past $4,000
Gold prices surged on Monday morning, trading near $4,038 per ounce after Brent crude fell more than 5% to around $83 per barrel. The connection between oil and gold is straightforward: cheaper oil reduces energy-driven inflation, which in turn eases the urgency for Federal Reserve rate hikes.
The mechanism has been running in reverse since the US-Iran conflict began on February 28, 2026. As tensions escalated, oil prices rose, pushing up rate expectations and reducing demand for gold. However, with President Trump's announcement that Iran and several Middle Eastern countries had asked the United States to hold off on a planned strike, oil markets responded immediately.
The proposed deal would include the full reopening of the Strait of Hormuz and an end to Iran's nuclear program. While officials in Iran denied Trump's account, calling it 'a new lie', the market is pricing in a 48-hour reprieve from escalation - not a done deal.