Gold futures on the New York Mercantile Exchange fell on the 20th, with the most active June 2026 contract dropping $38.60 to settle at $4841.00 per ounce, a decrease of 0.79%. The decline in gold and silver prices was influenced by uncertainty surrounding the impending expiration of a two-week ceasefire between the U.S. and Iran, set to lapse on the evening of the 22nd, Washington time, with the prospects for further negotiations remaining unclear.

Following continued U.S. naval blockades in the Strait of Hormuz and the seizure of an Iranian vessel, Iran has hesitated over sending diplomats to Pakistan for a second round of peace talks. Iranian media reported that Tehran's participation is contingent on certain preconditions being met, with the ongoing maritime blockade cited as a major obstacle.

This week will see the release of business survey data from several nations. According to Bloomberg, initial Purchasing Managers' Index figures from the first month of the U.S.-Israel-Iran conflict indicated impacts on both economic growth and inflation. A key focus of the upcoming data will be whether this dual pressure intensified in the second month. Worsening readings are broadly anticipated for Germany, France, the Eurozone, and the UK, while U.S. indicators are expected to show little change. This data may signal the potential degree of stagflation.

Citing oil price shocks stemming from the conflict, the International Monetary Fund has revised down its global growth forecast for 2026, projecting world economic growth at 3.1%, lower than the 3.3% forecast in January. Concurrently, the IMF raised its inflation expectations due to rising energy and food prices.

A foreign exchange and commodities strategist at HSBC noted that while the conflict has increased short-term volatility in gold prices, the medium to long-term outlook remains positive. Factors such as heightened geopolitical risks, increasing fiscal deficits, and continued central bank purchasing are expected to underpin further gains in gold.

In related trading, the May silver futures contract fell $1.973 to settle at $80.460 per ounce, marking a decline of 2.39%.