Gold and silver prices are still stuck in the wave zone established since the US-Iran conflict broke out, while high precious metal prices and new import tariffs are having a significant impact on important consumption markets in Asia, according to precious metal experts from the German technology and precious metals group (Heraeus).
In the latest report, experts said that gold price movements are still mainly dominated by constantly changing signals from negotiations between the US and Iran.
Gold prices initially fell this week after signs appeared that negotiations between Iran and the US are making progress to end the conflict and reopen the Strait of Hormuz" - the report said.
According to Heraeus, although the situation is still not completely clear as the two sides continuously make contradictory statements, the possibility of reaching an agreement is now significantly higher than a few weeks ago.
More specific details about a potential agreement appearing on May 28 helped gold prices stabilize again. This agreement is likely to include the US ending the blockade of the Strait of Hormuz, in exchange for Iran allowing commercial ships to circulate safely. More sensitive contents, such as Iran's nuclear program, may be postponed for further negotiations within 60 days after the agreement is signed.
It is noteworthy that the reaction of the gold market in this conflict is somewhat unusual.
Since the US-Iran war began, precious metals have usually decreased in price when conflict escalates due to concerns about inflation leading to interest rate hikes, and then recovered when tensions cool down. However, this time gold has fallen again after the clearest signal ever about the possibility of war ending" - experts said.
According to Heraeus, there are two possible reasons to explain this phenomenon. First, the market has become "indifferent" to geopolitical news due to too much conflicting information appearing in the past time. Second, more worryingly, investors believe that economic damage has occurred and short-term inflation is almost inevitable, leading to the risk of higher interest rates.
However, the recovery of gold from May 28 shows that the first reason is likely more accurate. However, if the agreement is not signed soon, market attention will return to the US Federal Reserve (Fed).
According to data from the futures contract market, there is currently a 50% chance that the Fed will raise interest rates before the end of this year.
Experts at Heraeus noted that the PCE inflation index is rising again, putting the Fed under increasing pressure to pursue a tougher stance.
The market expects the early end of the conflict to help the Fed maintain its path of gradually easing monetary policy. However, a delay of 4-6 weeks between the time the Strait of Hormuz reopens and when new oil sources actually reach consumers will be a key period when the global economy begins to reveal clearer signs of tension" - the report stated.
In addition to geopolitical factors, Heraeus also pointed out notable changes in the Asian market.
After India, Malaysia has applied a 10% import tax on gold bars that meet the standards of the London Gold Market Association (LBMA). Previously, India also increased import taxes on many gold products to protect the domestic currency and improve the balance of payments.
Pressure from the above factors caused spot gold prices to fall sharply in the first session of the week after losing the important support level of 4,500 USD/ounce. Gold prices at one point fell to 4,459.48 USD/ounce, losing 1.79% during the day.
For silver, Heraeus said that this metal has also fluctuated in a narrow range since the US-Iran war began.
Silver prices have fluctuated in the 70-90 USD/ounce range since the sell-offs in late January and early February, except for two short periods when prices exceeded this range," experts said.
The first time occurred at the end of February, just before the Middle East war broke out, when silver rose to 93.79 USD/ounce thanks to market optimism. However, the rapid increase was stopped when war broke out.
The second time occurred in mid-March when silver prices fell to 67.92 USD/ounce amid initial signals of a possibility of cooling down tensions. After that, prices recovered thanks to de-escalation negotiations.
According to Heraeus, with silver prices currently near the bottom of this range, any escalation of conflict could seriously challenge the 70 USD/ounce mark, even break it. Conversely, a peace agreement could bring silver prices back to the mid-zone of the fluctuation zone.
Experts also noted that smartphone demand in Europe is improving despite weak consumer sentiment. This is a small but growing silver consumption segment, with each device using about 0.3 grams of silver for electrical outlets and welding materials.
Meanwhile, the sharp increase in silver prices in the past year is leading to another consequence in India. The situation of poor quality silver is appearing more and more due to the mandatory silver content inspection regulation from September 2025 not being seriously implemented.
According to Heraeus, most silver products tested in India contain banned elements such as cadmium and lead. This affects jewelry, investment silver bars, coins as well as products serving religious activities.
India is currently the world's largest silver jewelry market with a production output of 70.3 million ounces in 2025, although it has decreased by 20% compared to 87.9 million ounces in 2024.
