Gold Prices Experience Severe Volatility, Here's the Main Cause
Jakarta, CNBC Indonesia - Gold prices fell on Monday, pressured by the strengthening of the US dollar and the re-emergence of inflation concerns that have clouded prospects for future interest rate cuts following the failure of US-Iran peace negotiations.
According to Refinitiv, gold prices closed at US$4,739.18 per troy ounce on Monday’s trading (13/4/2026), weakening by 0.17%. This decline extended its negative trend, weakening by 0.5% over the last two days.
Gold prices improved today. On Tuesday (14/4/2026) at 06:24 WIB, gold was priced at US$4,757.52 per troy ounce, strengthening by 0.39%.
The US dollar strengthened again, making the precious metal, priced in greenbacks, more expensive for holders of other currencies.
Gold prices have been highly volatile over the past week. Gold soared at the beginning of last week before collapsing at the end of the week and the start of this week. Gold’s volatility has followed news of the war, which is also full of uncertainty.
“The gold market is currently very much driven by headlines. All eyes are on crude oil prices because oil will determine inflation, and that will determine Federal Reserve policy,” said Phillip Streible, head of market strategy at Blue Line Futures, to Reuters.
After the negotiations failed, the US military stated it would blockade ships leaving Iranian ports, while Tehran threatened retaliation against the ports of neighbouring countries in the Gulf region.
West Texas Intermediate (WTI) crude oil prices rose 2.6% to US$99.08 per barrel. Meanwhile, international Brent surged 4.37% to US$99.36 per barrel.
The surging oil prices have triggered inflation concerns and limited room for the central bank to cut interest rates. High interest rates reduce the appeal of gold, which provides no yield, although this precious metal is known as a hedge against inflation.
According to the CME’s FedWatch Tool, market participants now estimate a roughly 29% chance that the US will cut interest rates by the end of the year, down from 40% a month ago.
Following the pessimism over interest rate cuts, spot gold prices have fallen more than 10% since the US-Israel war against Iran began on 28 February.
“We see the selling action due to this war as healthy for gold’s long-term prospects, as excessive speculative positions have now been reduced,” said an analyst at SP Angel.