Gold Prices Drop as Strong Dollar Overshadows Trade and Iran Tensions

Precious metals took a hit Tuesday as gold fell 1.5% from recent highs, weighed down by a strengthening U.S. dollar. The decline came despite ongoing concerns about trade policy changes and rising tensions with Iran that typically boost gold demand.

Precious metals markets experienced a sharp reversal Tuesday, with gold prices tumbling 1.5% as the strengthening U.S. dollar overshadowed geopolitical concerns and trade uncertainties that had previously supported the safe-haven asset.

Gold dropped to $5,150.38 per ounce by early morning trading after reaching its highest level in more than three weeks earlier in the session. April gold futures also declined, falling 1.1% to $5,170.70.

The retreat came as the dollar gained strength, making gold more costly for investors using other currencies. This pressure outweighed factors that typically drive investors toward gold as a safe haven.

Trade policy remains a key concern after President Trump issued warnings Monday to countries considering backing away from recently negotiated trade agreements. Following the Supreme Court’s decision to overturn his emergency tariffs, Trump threatened to impose “much higher duties under different trade laws” on nations that withdraw from deals.

Federal Reserve Governor Christopher Waller added to market uncertainty, stating he would consider keeping interest rates unchanged at the upcoming March meeting if February employment data shows the job market has “pivoted to a more solid footing” following weakness in 2025.

Current market expectations point to three quarter-point interest rate reductions this year, according to the CME FedWatch Tool.

International tensions also weighed on investor sentiment, with the State Department announcing Monday the evacuation of non-essential personnel and eligible family members from the U.S. embassy in Beirut due to escalating concerns about potential military action involving Iran.

These developments contributed to overnight losses on Wall Street that carried over into Asian markets Tuesday morning, creating broader uncertainty in global financial markets.

Other precious metals also faced selling pressure, with silver declining 3.1% to $85.50 per ounce after reaching a more than two-week peak Monday. Platinum dropped 2.9% to $2,092.31 per ounce, while palladium decreased 2.1% to $1,706.50.

Looking ahead, investors will be watching for France’s February business climate data and U.S. consumer confidence numbers, both scheduled for release later today.