April gold futures (GC=F) opened at $5,095 per troy ounce on Monday, down 1.2% from Friday’s closing price of $5,158.70. Gold has fallen 4.7% in the past week.
Rising oil prices are the main catalyst for gold’s decline. The Middle East war has damaged energy infrastructure and blocked shipping through the Strait of Hormuz, through which 20% of the world’s oil passes. Middle East producers are cutting output in response, triggering a supply shock and sending oil above $100 a barrel for the first time since 2022.
President Trump downplayed rising oil prices. In Truth Social, he predicted that oil prices will fall rapidly “when the destruction of Iran’s nuclear threat ends,” but he did not provide a definitive timeline for that goal.
Rising oil prices could reignite inflation in the United States and around the world, delaying interest rate cuts. Since gold pays no coupon, high interest rates negatively affect the demand and price of the yellow metal.
The opening price of gold futures on Monday was 1.2% lower than Friday’s close. Below is how the opening price of gold has changed compared to the past week, month and year:
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A week ago: -4.7%
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A month ago: +1.5%
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One year ago: +75.6%
Gold’s annual gain was 95.6% on January 29.
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The price of gold can be quoted in multiple ways because the precious metal is traded in different ways. The two main gold prices that investors should be aware of are spot prices and gold futures prices.
More information: How to invest in gold in 4 steps
The gold spot price is the current market price per ounce of physical gold as a commodity, sometimes called spot gold. Gold ETFs that are backed by physical gold assets generally track the spot price of gold.
The spot price is lower than what you would pay to buy gold coins, bars, or jewelry, as your total price will include a margin called the gold premium that covers refining, marketing, dealer overhead, and profit. The spot price is more like a wholesale price, and the spot price plus the gold premium is the retail price.
More information: Are you thinking of buying gold? Here’s what investors need to keep in mind.
Gold futures are contracts that call for a transaction in gold at a specific price on a future date. These contracts are traded on the exchange and are more liquid than physical gold. They are settled on or before the contract expiration date, either financially or by delivery. A cash settlement involves paying the contract profit or loss in cash. Delivery means that the seller sends physical gold to the buyer for the contracted price.
Supply and demand determine gold spot prices and gold futures prices. Factors that influence the supply and demand of gold include:
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Geopolitical events
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Central bank purchasing trends
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Inflation
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Interest rates
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Mining production
More information: Who decides how much gold is worth? How prices are determined.
Whether you are following the price of gold from last month or last year, the gold price chart below shows the constant rise in value of the precious metal.
More information: Alternatives to gold? How to invest in silver, platinum and palladium.