Gold prices dropped as much as 2.1% after President Trump threatened military action against Iran, even as both countries were actively engaged in peace negotiations. The metal fell below $4,420 per ounce, extending a roughly 20% decline from its recent peaks.
The threat inside the olive branch
Trump warned that Iran would “pay the price” for delays in negotiations, a statement that landed while US-Iran talks were advancing under a 60-day ceasefire framework.
The talks have actually produced tangible results. A preliminary memorandum between the US and Iran was reached in mid-June 2026, including terms to reopen the Strait of Hormuz. That waterway had been blockaded by Iran following retaliatory actions earlier this year.
The blockade itself was a response to US and Israeli strikes on Iranian nuclear facilities in early 2026, strikes that dramatically escalated a conflict with roots stretching back to the US withdrawal from the Joint Comprehensive Plan of Action in 2018.
