Precious Metals Review

Gold’s rally should resume once Iran conflict ends

“Investors could be facing a scenario of double 10Ks by the end of the decade — 10,000 for the S&P 500 and $10,000 for gold — if a forecast by Yardeni Research plays out.

“Our long-term bullish stance on gold rests on the idea that the S&P 500 could rally to 10,000 by the end of the decade. We expect that along the way, investors will rebalance into other assets, including gold,” Ed Yardeni, founder and president of financial research group, told clients in a note on Thursday.

While the S&P 500 SPX +0.58% and gold prices tend to be inversely correlated on a cyclical basis, over time, they march in the same direction together, so when the index hits 10,000, gold should do the same, said Yardeni.

The Wall Street veteran also sees a more upbeat near-term picture, with gold shaking off the gloom it has gathered since the Iran war, and rallying once that conflict officially ends. He expects gold will reach $5,500 an ounce by the end of 2026, nearly a $1,000 gain from Friday’s level of $4,553 an ounce.

While the S&P 500 SPX +0.58% has largely pushed aside the conflict to hit a string of record closes since a March 30 low, gold GC00 +0.33% has struggled to reclaim its peak of $5,318 an ounce reached in late January, he noted. Gold is up just 5% this year, after a spectacular rally of more than 70% in 2025.

The commodity fell sharply in March to around $4,375 an ounce and rebounded through mid-April as a cease-fire held. But gold seems to be testing that March low, its 200-day moving average of $4,407 an ounce and an intermediate upward trend line, following a late Thursday report that Iran and the U.S. could be close to extending their cease-fire for 60 days, said Yardeni.

“The drop in prices since the end of January has put it back within an upward-trending channel that began in late 2023,” and that support looks ready to hold, he said.

Gold’s wartime struggle has come as the dollar rose, which is bearish for gold, and some central banks had to sell reserves of the precious metal to support their currencies weighed down by higher oil prices. Yardeni expects the Federal Reserve will turn more hawkish on interest rates during the summer, which would stall a gold rally, but the end of the Iran conflict should help diminish that impact.”

“Gold gained on Friday on hopes of a potential ‌U.S.-Iran ceasefire, but prices were on track for a third straight monthly decline as concerns about energy-driven inflation bolstered expectations of higher interest rates.

Spot gold was up 0.9% at $4,532.03 per ounce, as of 1151 ​GMT. Bullion fell to a two-month low of $4,365.76 on Thursday, but closed higher. ​The metal has fallen around 2% so far this month.

U.S. gold futures ⁠for August delivery rose 0.7% to $4,562.60.

“Gold remains negatively correlated to oil, which impacts inflation ​and monetary policies. Lower oil prices reduces the probability of rate hikes, which is positive ​for gold,” said UBS analyst Giovanni Staunovo.

Oil futures fell more than 1% and were on track for their steepest weekly decline since early April, after reports that the U.S. and Iran reached an agreement on ​Thursday to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz.

However, ​U.S. President Donald Trump is yet to approve the agreement and Iranian state media said it had ‌not ⁠been finalised.

U.S. inflation increased at its fastest pace in three years in April, driven by higher energy prices due to the Iran war. The surging prices cemented economists’ views that the Federal Reserve would hold interest rates unchanged well into next year, with some even expecting ​a rate hike by ​the end of ⁠this year.

While gold is considered a hedge against inflation, the non-yielding asset tends to come under pressure in high-interest-rate environments.

“May 2026 marked ​a period of consolidation across global markets following a turbulent first ​quarter. While geopolitical ⁠tensions and inflation concerns continued to influence sentiment, easing safe-haven demand and a firmer interest-rate outlook pressured precious metals during the month,” precious metals trading firm Rotbart & Co wrote in a ⁠client ​note.

Spot silver was steady at $75.61 per ounce and platinum ​lost 0.1% to $1,920.75, while palladium gained 0.8% to $1,378.67. Platinum and palladium were headed for monthly losses, while silver was ​on track for a monthly gain.”