Oil prices continued their upward trajectory on May 28. At the time of reporting, WTI crude was trading at $94.588 per barrel, up over 2.7%, while Brent crude reached $95.31 per barrel, gaining more than 2.6%.

The market movement is attributed to heightened geopolitical tensions. The U.S. military conducted a new round of strikes on Wednesday against a target within Iran, deemed a threat to U.S. forces in the Middle East and commercial traffic through the Strait of Hormuz. U.S. forces also intercepted and shot down multiple Iranian drones identified as threats. Market analysts suggest these military actions could further destabilize the Middle East and increase uncertainty for global energy transportation.

In related developments, U.S. President Trump stated at a cabinet meeting on May 27 that Iran is attempting to "play for time" but will not succeed. He emphasized he would not rush into an agreement with Iran due to the approaching midterm elections, stating, "I don't care about the midterm elections." He added that Iran is very eager for a deal but has not yet delivered, threatening that the options are "either we make a deal, or we have to finish the job," implying potential military action.

Iran's Islamic Revolutionary Guard Corps (IRGC) public relations department issued a statement on May 28, claiming that following a U.S. airstrike on a location in the suburbs of Bandar Abbas in the early hours, the IRGC retaliated by striking the U.S. airbase responsible for the attack. Furthermore, Iran's Tasnim news agency, citing a military source, reported that four vessels attempting to pass through the Strait of Hormuz without permission were forced to turn back after warning shots were fired by the Iranian navy.

Meanwhile, international gold prices declined. Spot gold fell below the $4,400 per ounce mark for the first time since March 27, trading at $4,395.045 per ounce, down 1.37%. COMEX gold was at $4,432 per ounce, down 1.1%.

Domestic gold jewelry prices in China also saw collective declines. Chow Tai Fook was quoted at ¥1,353 per gram, down ¥22 from the previous day, a daily drop of 1.60%. Chow Sang Sang was at ¥1,350 per gram, down 1.89%. Lao Feng Xiang and Chow Sang Fook were both quoted at ¥1,348 per gram, with declines exceeding 1.6%.

Beyond the Iran-U.S. tensions, other factors pressured gold. The U.S. manufacturing PMI jumped significantly from 54.5 to 55.3, far exceeding expectations and hitting a four-year high. Sub-indices pointed to stagflation concerns. Additionally, Federal Reserve Governor Cook adopted a hawkish stance, stating readiness to support rate hikes if anticipated inflation declines fail to materialize promptly, leading markets to continue pricing in rate hike expectations.

According to the CME FedWatch Tool, the probability of the Fed maintaining the benchmark rate in the 3.50%-3.75% range at its mid-June meeting is nearly 99%. Concurrently, the probability of at least a 25-basis-point hike by the December meeting is close to 50%.

Notably, several institutions have recently lowered their gold forecasts. Citibank predicts gold could touch $4,300 per ounce within the next three months. Morgan Stanley revised down its gold price target for the second half of 2026 to $5,200 per ounce. ANZ lowered its year-end gold target to $5,600 per ounce.