5Upper IntermediateBusinessBusiness

Gold Prices Fall as the Hormuz Effect Shakes Global Markets

Gold prices have dropped sharply due to the ongoing US-Iran conflict and the closure of the Strait of Hormuz. The disruption has caused oil prices to surge above $106 per barrel, raising fears of global inflation. Investors and analysts are closely watching these developments as markets remain volatile.

1 min readLevel 5April 28, 2026

By Flalingo Editorial Team

Vocabulary

Study these words before reading the article. Click the audio button to hear pronunciation.

surge

/sɜːrdʒ/

verb

To increase suddenly and by a large amount

“Oil prices surged after the trade route was closed.”

decline

/dɪˈklaɪn/

verb

To decrease in value, amount, or quality over a period of time

“Sales declined by 15% in the third quarter of the year.”

vital

/ˈvaɪtl/

adjective

Extremely important and necessary for something to succeed or exist

“Access to clean water is vital for public health.”

inflation

/ɪnˈfleɪʃn/

noun

A general increase in prices and fall in the purchasing value of money

“Rising inflation has made everyday goods more expensive for consumers.”

volatile

/ˈvɒlətaɪl/

adjective

Likely to change suddenly and unexpectedly, especially in a negative way

“The stock market has been very volatile this month.”

geopolitical

/ˌdʒiːoʊpəˈlɪtɪkl/

adjective

Related to politics and power relations between countries, especially involving geography

“Geopolitical tensions often affect international trade and investment.”

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Article

Click on any underlined word to see its definition. Highlighted words are from the vocabulary section.

Gold prices have declined significantly in recent days. Spot gold dropped by 1.1% to $4,629 per ounce. This marked its lowest level since April 7. Analysts say the decline is linked to fading peace hopes. The so-called Hormuz Effect has become a key factor.

The Strait of Hormuz remains closed due to the US-Iran conflict. This vital waterway is essential for global oil trade. Its closure has caused oil prices to surge above $106 per barrel. Higher energy costs have raised serious concerns about global inflation. A stronger US dollar has also put downward pressure on gold.

President Trump reportedly said he was not satisfied with Iran's offer. This statement severely weakened hopes for a peace agreement. Markets reacted quickly, and gold prices fell further. Silver also dropped by 1.3% to $74.43 per ounce. In Turkey, gram gold was trading at 6,706 Turkish lira.

If the strait were reopened, oil prices would likely stabilize quickly. However, experts believe the conflict could continue for some time. The economic consequences are being felt across many industries worldwide. Investors are advised to monitor geopolitical developments very closely. Risk management strategies have become more important than ever before.

Comprehension Quiz

Test your understanding of the article with these multiple-choice questions.

1
By what percentage did spot gold drop?
2
What caused oil prices to surge above $106 per barrel?
3
What was the price of silver after the drop?
4
What would likely happen if the Strait of Hormuz were reopened?
5
Which factor, along with geopolitical tensions, pushed gold prices down?

Discussion

Answer these comprehension questions about the article.

1
What is the main reason gold prices have dropped according to the article?
2
How has the closure of the Strait of Hormuz affected oil prices?
3
Why did President Trump's statement cause gold prices to fall further?
4
What role has the US dollar played in the decline of gold prices?
5
How much was gram gold trading for in Turkish lira?

Further Discussion

Share your opinions on these open-ended questions.

1
If you were an investor, how would you protect your portfolio during this crisis?
2
Do you think gold is still a safe investment during times of geopolitical conflict?
3
How should businesses prepare for sudden increases in energy costs?
4
What strategies could a company use to manage risk in volatile markets?
5
If you were advising a government, what steps would you suggest to reduce inflation?