Gold prices drop resulting from Strait of Hormuz closure, dealer says

SEATTLE (Scrap Monster): The president of a gold and silver trading company says tensions surrounding the Strait of Hormuz have contributed to a recent drop in gold prices.

“Typically, during a war, gold prices rise significantly,” Max Baecker of American Hartford Gold told NewsNation.

“But with this oil situation, with the Strait of Hormuz, it’s tough because you’ve got oil prices around $110 a barrel. That pushes inflation expectations up, which lowers expectations for interest rate cuts. As a result, markets are in a wait‑and‑see period.”

Investors flocked to profit-taking when Iran war began: Dealer

Baecker said that when the conflict involving Iran began, investors engaged in widespread profit‑taking, leading to increased selling of gold.

Since the U.S.‑ and Israel‑backed military action began Feb. 28, Iran has largely restricted access through the Strait of Hormuz, a key artery for global energy supplies. The disruption has driven up fuel prices and unsettled financial markets. The United States has also imposed a blockade of Iranian ports.

Baecker noted that central banks increased gold purchases sharply in 2025, helping drive prices significantly higher.

“You had countries in 2025 — central banks buying gold at the fastest pace ever — which caused gold to run up 70% in 2025,” he said.

Gold was due for a cool-off period after boom: dealer

Gold prices reached a record high of about $5,500 an ounce in January before falling roughly 16% to around $4,700, according to Baecker.

“It was due for a bit of a cool‑off period,” Baecker said. “But all the reasons for gold and silver to be substantially higher from here are still in place, including central bank demand and broader economic pressures.”

Asked about silver, Baecker said he sees potential for future gains, though he cautioned that the market remains volatile.

“You’ve seen what China has done — they control a significant share of the world’s silver,” he said. “They’re not exporting it. They’re holding it. That’s why you saw silver move up sharply. There’s more upside, but investors have to be prepared for volatility.”

Courtesy: www.newsnationnow.com