Gold prices fell more than 1% on Monday as escalating fears of a Strait of Hormuz closure drove crude oil sharply higher.
The move in energy markets revived expectations that central banks may need to maintain elevated interest rates to combat inflationary pressures stemming from the geopolitical standoff.
This dynamic has created headwinds for gold, which had previously found support near the $4,000 level.
This marks a shift in market sentiment, where the immediate risk of supply disruption is outweighing the traditional safe-haven appeal of precious metals.
The cross-asset reaction highlights the growing dominance of shipping risk in global trade flows.
As oil prices surged, traders adjusted their positioning, betting that persistent tensions would keep energy costs elevated.
This dynamic has created headwinds for gold, which had previously found support near the $4,000 level.