Inflation-related market positioning appeared to shift on Monday — and gold appeared to benefit from the move. . Spot gold rose 1.1% to $4,559.07 per ounce as of 0736 GMT, while June delivery futures gained 0.8% to $4,559.80, as currency markets digested the prospect of a US-Iran memorandum of understanding that could reopen the Strait of Hormuz. Oil prices fell to two-week lows on that same read. Lower crude tends to soften near-term inflation expectations — and softer inflation expectations push back against the case for keeping rates elevated, which may reduce one of gold’s longer-term headwinds.
The catalyst traces back to Saturday. Trump described Washington and Tehran as having “largely negotiated” a peace deal, a phrase markets appear to have weighted more heavily than his Monday caveat that he was “in no hurry” to finalise anything. That tension — between a headline-driving presidential statement and a walk-back that followed within 48 hours — is exactly the kind of noise that tends to keep safe-haven positioning alive rather than dissolve it.
The Strait of Hormuz Read, and Why It Points Both Ways
The logic driving Monday’s gold move, as Tim Waterer, chief market analyst at KCM Trade, told CNBC, runs through oil: “Trump has been raising market hopes for some sort of deal with Iran, which could lead to the reopening of the Strait of Hormuz. That prospect has weighed on oil prices and, by extension, given gold a welcome lift from an inflation perspective.”
That framing matters. Part of gold’s move may reflect interest-rate expectations alongside geopolitical positioning . If a credible Hormuz deal lowers Brent, the inflation print softens, the front-end pricing on Federal Reserve action shifts, and non-yielding assets like gold become relatively more attractive. The dollar — already around its lowest levels of the week by the time London opened, per CNBC — added further mechanical support, since dollar weakness makes greenback-priced bullion cheaper for holders of other currencies.
The broader precious metals complex moved decisively with gold. Spot silver climbed 3.1% to $77.79 per ounce, platinum rose 2.3% to $1,966.59, and palladium was up 2.7% at $1,384.70. Silver’s outperformance — nearly three times gold’s percentage gain — is consistent with the industrial demand angle in silver positioning, separate from any safe-haven read. Historically, silver has at times shown larger percentage moves than gold during periods of broad dollar weakness . Monday’s market activity appeared broadly consistent with that pattern
| Asset | Move | Level (0736 GMT) |
|---|---|---|
| Spot Gold (XAU/USD) | +1.1% | $4,559.07 / oz |
| Gold Futures (June, GC=F) | +0.8% | $4,559.80 / oz |
| Spot Silver | +3.1% | $77.79 / oz |
| Platinum | +2.3% | $1,966.59 / oz |
| Palladium | +2.7% | $1,384.70 / oz |
Source: CNBC, as of 0736 GMT, 25 May 2026
The Warsh Factor — Regime Change at the Fed
There is a second layer to Monday’s gold story that the Iran headlines risk obscuring. Kevin Warsh was sworn in as Federal Reserve chair on Friday, stepping into the role at what the CNBC report characterises as a pivotal moment — surging gasoline prices tied to the Iran conflict have been fuelling inflation and eroding consumer sentiment simultaneously. That is a difficult inheritance for any incoming chair: tighten into a consumption slowdown, or tolerate an inflation overshoot in the hope that a deal cools energy prices.
A potential Hormuz reopening could, in theory, give Warsh a cleaner hand on his first move. Lower oil prices and softer inflation data could potentially give policymakers greater flexibility. Markets may be running that scenario. If that read is correct, then Monday’s gold rally is not just a geopolitical trade — it is also an early positioning bet on the direction of US monetary policy under a new chair.
The Obvious Bear Case
The counter here is straightforward: diplomatic momentum in US-Iran talks has stalled and reversed before, and Secretary of State Marco Rubio’s Monday statement — that the US will either have a “good agreement” or deal with Iran “another way” — is not language that typically precedes a signed deal. If the MOU framing collapses over the coming days, oil recovers, the inflation read firms back up, and support for gold linked to rate-relief expectations could weaken . The dollar’s recent weakness may also be shallow; a single week’s move at “around its lowest levels” is not a structural repricing.
Gold has historically held up even when the initial geopolitical catalyst fades, because the underlying rate and dollar dynamics have at times persisted independently of the initial geopolitical catalyst.. But that pattern is not guaranteed to repeat, and a deal that fails to materialise could lead to increased short-term volatility or partial reversal.
What’s Next
Traders watching this position will be focused on any further statements from the US or Iranian delegations on the MOU’s status. On the monetary policy side, scheduled FOMC calendar events and any public remarks from incoming Fed Chair Warsh will be the primary variables that either reinforce or undercut the rate-relief narrative currently supporting gold. For energy market updates that feed directly into the inflation-via-oil channel, the EIA weekly petroleum supply report provides the most current inventory read.
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