Gold and Silver Stage Dramatic Late-Session Rebound as Iran Tensions Show Signs of Easing

Precious metals surge in final hour of trading after suffering worst weekly performance in over four decades. Gold mounted a dramatic late-session rally on Monday, with spot prices breaking out above $4,400 and climbing sharply in the final hour of trading—a move that may signal an end to the punishing ten-day losing streak that has defined the market since the Iran conflict erupted.

As of 4:58 PM EST, spot gold was trading at $4,474, up $68 or 1.53% on the day. Silver followed suit, surging from $69 to $71.22—a gain of $2.13 or 3.07%—in a coordinated breakout that began around 4:15 PM EST.

The rebound came after gold touched a four-month low of $4,098 earlier in the session, briefly erasing all of its year-to-date gains. The precious metal has now fallen roughly 20% from its February 28 price, when the United States and Israel launched coordinated strikes on Iran—a decline that has confounded investors expecting gold to fulfill its traditional safe-haven role.

A Safe Haven That Wasn't

When the conflict began, gold initially surged as markets priced in classic flight-to-safety demand. Yet the rally proved short-lived. Since March 2nd—the first trading day after hostilities commenced—gold has managed gains on only three sessions. The daily charts paint a starkly pessimistic picture, with the yellow metal shedding more than 21% from its January 29 record high of $5,594.82. 

The paradox is striking. Oil has soared above $100 per barrel as the closure of the Strait of Hormuz choked off roughly a fifth of global crude and liquefied natural gas shipments. The S&P 500 has declined 3.8% over the past month, while the Dow Jones Industrial Average has fallen 5.3%. Yet gold—the asset class most commonly associated with geopolitical hedging—has moved in the opposite direction.

"If the war continues and energy prices keep grinding higher, it's not great news for gold," said Bart Melek, global head of commodity strategy at TD Securities. 

The Rate and Dollar Double Bind

The explanation lies in the mechanics of inflation expectations. The Iran conflict has stoked fears of persistent price pressures, principally through surging energy costs. When inflation looks stubborn, central banks are more likely to maintain—or even raise—interest rates. Gold, which pays no yield, suffers in that environment as bonds and cash become more attractive alternatives.

Traders now see virtually no chance of a Federal Reserve rate cut at its next meeting, with the probability of any easing this year scaled back sharply. Major central banks have emphasized their readiness to act if the conflict drives a broader surge in prices. 

Compounding the interest rate pressure, gold has faced headwinds from a stronger U.S. dollar. Although the dollar index fell back below 100 on Monday, it remains roughly 1.5% higher than when hostilities began at 99.25. A stronger greenback makes gold more expensive for international buyers, particularly in key markets like China and India. 

"What we're seeing in precious metals signals that central banks and Gulf states are tapping into the gold reserves they have built over the past couple of years," said Nic Puckrin, co-founder of Coin Bureau. "The focus has moved from accumulation to capital preservation. This will put a natural cap on gold prices."

Technical Signals Point to a Possible Floor

Despite the carnage, Monday's session offered tentative evidence that the worst may be over.

Gold's bounce off the 200-day simple moving average—currently sitting near $4,100—represents a key technical development. The yellow metal tested that level on Monday morning before reversing sharply higher, a pattern that often signals institutional buying interest at a widely-watched support zone.

"The recent price slump is likely to be just as much of an overreaction as the massive rise at the start of the year," analysts at Commerzbank wrote in a note. "In a sense, the pendulum has swung from one extreme to the other for gold." 

The late-session breakout above $4,400 adds weight to the view that selling pressure may be exhausting itself. Silver's even sharper percentage gain—after losing nearly half its value from its late-January peak of $121—suggests bargain hunters are beginning to re-enter the market.

Diplomatic Developments Shift Sentiment

The immediate catalyst for Monday's rebound appears to be diplomatic rather than technical. President Donald Trump announced a five-day postponement of planned strikes on Iranian energy infrastructure following what he called "good and productive" talks between the two nations. Pakistan's prime minister also offered to host peace negotiations to help end the conflict. 

Any de-escalation would ease the inflation fears that have weighed so heavily on gold, potentially giving the Federal Reserve more room to consider rate cuts later in the year.

"Gold is going to be under pressure for the second quarter, but I think by year-end, the gold outlook should again look pretty sweet," Melek added. "By then central banks like the Fed will have more freedom and we could see the dollar ease and rates drop." r

The Longer View

For all the recent turmoil, major banks have maintained their bullish long-term outlooks, with price targets of $6,000 to $6,200 per ounce by late 2026. 

"Gold continues to maintain strong structural bullish momentum supported by solid fundamental drivers, most notably ongoing global economic uncertainty and rising institutional demand for hedging," stated Rania Gule, senior market analyst at XS.com. "However, this momentum does not move in a straight line; it is often interrupted by sharp corrections that are necessary." 

Whether Monday's rally represents a genuine turning point or merely a pause in a broader correction remains to be seen. But after ten consecutive days of losses and a decline of historic proportions, gold bulls will take whatever relief they can get.

Wishing you as always. good trading,