Gold and silver prices fell approximately 3% on Monday, marking a sharp reversal in sentiment for precious metals.
The sell-off was triggered by US President Donald Trump’s announcement that he would reinstate a naval blockade against Iran, a move that immediately shifted market focus from safe-haven assets to energy and shipping risks.
The decline in bullion prices underscores a rapid rotation in risk appetite.
While geopolitical tensions typically drive investors toward gold, the specific nature of a naval blockade introduces immediate supply-chain disruptions and energy price volatility.
Traders appear to be prioritizing exposure to oil and freight rates over traditional safe havens, interpreting the blockade as a catalyst for inflationary pressure rather than a systemic financial threat.
This development follows a period of heightened diplomatic uncertainty.