TLDR
- Gold retreated as rising oil revived inflation fears and lifted the dollar against bullion demand.
- Trump’s rejection of Iran’s response lowered peace hopes and kept Hormuz supply risks in focus.
- Oil gains raised concerns that energy costs may delay Federal Reserve rate cuts further again.
- A stronger dollar made gold costlier for overseas buyers and added pressure to spot prices.
- Analysts cited a broad $4,400 to $4,800 gold range while the standoff continues for now.
Gold prices fell on Monday as stalled US–Iran peace talks pushed oil prices higher. The rise in crude raised fresh inflation worries and supported the US dollar.
Spot gold dropped 1.2% to $4,657.89 per ounce by 0607 GMT. US gold futures for June delivery fell 1.4% to $4,665.70.
Oil Prices Rise After Peace Hopes Fade
Gold came under pressure after President Donald Trump rejected Iran’s response to a US peace proposal. The move reduced hopes for a quick end to the ten-week conflict.
The conflict has damaged parts of Iran and Lebanon. It has also disrupted maritime traffic in the Strait of Hormuz.
Oil prices climbed as traders priced in supply risks from the region. The Strait of Hormuz remains a key route for global crude shipments.
Tim Waterer, chief market analyst at KCM Trade, linked gold’s fall to the oil move. He said gold was “feeling the pinch from the renewed rise in crude prices.”
Inflation Worries Lift Dollar and Hurt Gold
Higher oil prices can raise transport and energy costs. That can keep inflation above the Federal Reserve’s comfort zone.
Because of that, traders reduced hopes for faster US rate cuts. High interest rates usually weigh on gold, since gold pays no interest.
The US dollar also rose during the session. A stronger dollar makes gold more expensive for buyers using other currencies.
Gold often attracts demand during stress, but rate concerns limited buying. Investors also waited for April US Consumer Price Index data due this week.
Fed Path and China Output Stay in Focus
The Federal Reserve has already flagged energy prices as a concern. Its latest financial stability report pointed to the Iran conflict and oil supply risks.
Goldman Sachs also changed its view on future US rate cuts. It now expects cuts in December 2026 and March 2027.
The bank earlier expected cuts in September and December this year. It cited high energy prices as a reason for the later rate-cut view.
Meanwhile, China’s gold production fell in the first quarter of 2026. The China Gold Association linked the drop to safety checks and smelter maintenance.
Waterer said the gold price range remains wide while the conflict continues. He said “the $4,400 to $4,800 range still looks firmly in play.”
Other precious metals also weakened during the session. Spot silver fell 0.2% to $80.13 per ounce.
Platinum slipped 1.2% to $2,029.95, while palladium dropped 0.7% to $1,481.09. Markets now await inflation data and any fresh signals from US–Iran talks.
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