Gold Heads for Historic Monthly Jump Near $4700 on US-Iran 'Economic War'

The PRICE of GOLD fell from a new 15-week high in London trade on Tuesday but held on track for a dramatic monthly jump as US Treasury bonds rallied and crude oil sank amid talk of "significant progress" towards US-Iran negotiations to end the Middle East war.

Gold peaked overnight within $4 per troy ounce of $4700 after US Treasury Secretary Scott Bessent announced Operation Economic Outcast − "an unprecedented, whole-of-government, economic campaign against the Islamic Republic of Iran and its enablers" which he likened to D-Day in World War 2.

"Iran is completely collapsing," US President Trump then added.

"[But] if you were victorious in the military arena, you wouldn’t have to start an economic war," replied an IRGC spokesman in Tehran, a point echoed by official media in China, which buys 4/5ths of Iran's oil exports.

"Watching a superpower which cannot win a conflict pretend it can win an economic siege would be comic if it weren't so tragic," said China Daily.

Yet gold then fell back as crude oil fell − extending Brent's drop from Friday's 3-month high to more than 5.0% − as diplomats in Pakistan sounded "a highly positive note" about their "efforts to end the stalemate in the ongoing US-Iran conflict and explore ways for achieving enduring peace."

Borrowing costs in the bond market also dropped, cutting 30-year yields to the lowest in 3 weeks at 5.18% per annum, while the gold price dropped $90 from last night's peak, extending gold's break from its historic correlation against bond yields but remaining on track for a monthly rise of 14.6%.

Aside from January's 15.6% leap, any gain above 13.9% when August ends this Friday would mark gold's strongest month-on-month price rise since the September 1999 rebound spurred by the Western central banks' Washington Agreement on curbing their bullion sales and lending following the UK's shock gold selling announcement that May.

"Crypto and gold are back in style," says a headline at CNBC, reporting that "US government spending concerns have given a second wind to the debasement trade" since Bessent's Treasury last week announced a bond buyback scheme aimed at reducing longer-term interest rates from multi-decade highs.

But while Bitcoin today traded at its highest since mid-May on Tuesday, it remained 9.6% lower for 2026 to date.

Gold was 7.0% higher since New Year's Eve.

"Iran is fully prepared for the American sanctions," said Tehran's Economy Minister Ali Madani Zadeh today. "We know how to play this game."

"After nearly six months of war without a military or diplomatic victory," says Sina Toossi, senior fellow at the Center for International Policy think tank in Washington, "the Trump White House is betting it can accomplish through intensified economic strangulation what military force has so far failed to achieve."

Silver prices also fell back with gold on Tuesday, peaking within 6 cents of $70 per ounce after touching that 2-month high last Friday, and then dropping towards $68.