Global Gold Prices Fall as Stalled US-Iran Peace Talks Spark Inflation Fears
JAKARTA - Global gold prices weakened in early Asian trading on Monday (11/5/2026), as hopes for a peace agreement between the United States (US) and Iran faded.
The stalled negotiations have driven a surge in oil prices, thereby triggering concerns that inflation will remain high for longer.
Citing Reuters, spot gold fell 0.6 percent to $4,684.32 per ounce. Meanwhile, US gold futures for June delivery weakened 0.8 percent to $4,692.70 per ounce.
The strengthening of the US dollar also weighed on gold prices. The dollar’s rise makes gold more expensive for holders of other currencies, thereby reducing the appeal of the precious metal.
This situation has dashed hopes for an end to the conflict that has lasted 10 weeks and caused widespread damage in Iran and Lebanon, paralysing maritime traffic in the Strait of Hormuz, and driving up global energy prices.
Head of Market Analysis at KCM Trade, Tim Waterer, said the market is now starting to reduce expectations for a peace agreement in the near term.
“Essentially, we are seeing fading hopes for a peace agreement in the near term, and gold is being pressured by the renewed rise in crude oil prices,” he stated.
Global oil prices surged more than 3 percent in early trading on Monday, as the Strait of Hormuz remains largely closed, keeping global energy supplies tight.
The rise in crude oil prices risks pushing inflation higher and increasing the likelihood that interest rates will remain at high levels for longer.
Although gold is known as a hedge against inflation, a high interest rate environment typically pressures gold’s appeal because it offers no yield.
Market participants are now awaiting US Consumer Price Index (CPI) data for April 2026, to be released this week, for clues on the Federal Reserve’s next monetary policy direction.
Meanwhile, the China Gold Association reported that China’s gold production in the first quarter of 2026 declined compared to the same period last year.
The decline occurred after safety inspections caused several smelting facilities to temporarily halt operations for maintenance.
Waterer also forecasts that gold prices will continue to move in a relatively high range until there is a definitive peace agreement between the US and Iran.
“In the short to medium term, the $4,400 to $4,800 per ounce range still looks solid as long as we are in a ceasefire situation without a peace agreement,” said Waterer.