US-Iran Diplomatic Breakthrough Fails, Sending Gold & Silver Prices Plunging

Gold and silver futures plummeted on Monday after negotiations between the US and Iran broke down, causing crude oil prices to surge. The sharp decline in precious metals was triggered by concerns about inflation and expectations that the Federal Reserve will maintain higher interest rates for longer.

The COMEX gold futures dropped more than 2% to hit an intraday low of $4,224.1 per ounce, while silver's fall was even steeper at around 4% to a low of $62.21 per ounce. The rise in the US dollar and higher Treasury yields also contributed to the market sentiment.

Ashish Rajodiya, Head, Commodities at PL Capital, highlighted that elevated crude prices are not boosting gold's safe-haven appeal as they typically would during geopolitical stress. Instead, they reinforce the case for further Fed tightening, which leads to a stronger dollar and steeper yield curve that work against non-yielding bullion.