Gold Prices Fall Due to Inflation Concerns and Failure of US-Iran Negotiations

Global gold prices weakened at the beginning of this week as concerns about global inflation rose following the failure of peace talks between the United States (AS) and Iran.

This situation strengthened the US dollar and triggered a surge in oil prices, which ultimately weighed on the outlook for interest rate cuts by the US central bank this year.

In Monday (13/4/2026) trading, spot gold prices fell 0.7% to US$ 4,716.70 per ounce, reaching the lowest level since April 7.

Meanwhile, US gold futures contracts for June delivery also dropped 1% to US$ 4,738.90 per ounce. At the same time, the US dollar strengthened by 0.4%, making gold priced in dollars more expensive for global investors.

Pressure on gold increased further after oil prices jumped back above US $100 per barrel. The rise was driven by an escalation of tensions in the Middle East, following the failure of negotiations between the US and Iran to end the conflict.

The US was even reported to be preparing a blockade in the Strait of Hormuz to limit Iranian oil exports.

In response, Iran’s Revolutionary Guard warned that any military vessel approaching the area would be considered a violation of the ceasefire and would be dealt with decisively.

KCM Trade analyst Tim Waterer said this situation causes market sentiment to change quickly. “Ceasefire optimism fades, and the surge in the dollar and oil prices once again weighs on gold,” he said.

Since the conflict between the US and Israel against Iran broke out on February 28, gold prices have already fallen by more than 11%. Historically, however, gold usually becomes a safe-haven asset amid geopolitical turmoil and inflation.

But high interest rates reduce gold’s appeal because it does not provide returns. The rise in energy prices that fuels inflation also makes central banks more inclined to hold interest rates steady or even raise them.

According to Waterer, each time oil prices break through US$ 100 per barrel, the market immediately starts speculating about the potential for interest rate increases to rein in inflation.

“It’s these expectations for interest rate hikes that weaken gold’s performance,” he said.

At present, market participants assess that the likelihood of the US central bank cutting interest rates this year is getting slimmer.

Previously, before the Middle East conflict heated up, the market had expected two interest rate cuts over the course of this year.

Read Also: Gold Prices Drop, Inflation Concerns Weigh on Fed Rate Cut Prospects

In other metals markets, silver prices fell 2% to US$ 74.35 per ounce, platinum weakened 0.2% to US$ 2,041.40, while palladium rose 0.7% to US$ 1,530.80 per ounce.

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