Gold drops early Monday as hopes for a U.S.-Iran peace deal dissipated, clouding interest rate-cut hopes and boosting the dollar, making the yellow metal a less attractive alternate investment.
U.S. President Donald Trump on Sunday said Iran’s response to the most recent U.S. peace proposal was “totally unacceptable” and accused Tehran of “playing games” in attempts to end the conflict, which began in late February with joint U.S. and Israeli strikes against Iran. Israeli Prime Minister Benjamin Netanyahu said there is “still work to be done” in the joint offensive in an appearance on CBS’ “60 Minutes” Sunday evening.
Gold prices have fallen since the conflict began and ticked up on possibilities of a detente.
June gold futures rose 1.9% last week to $4,730.70 an ounce on Comex, after the most-active contract gained 0.4% Friday. Bullion dropped 1% last month after sliding 11% in March and climbing 11% in February. It rallied 64% last year. The current June contract has tipped up $21.20 (+0.45%) an ounce to $4751.90 and the DG spot price is $4743.90 as traders bought the early morning dip.
The Iran conflict has resulted in the closure of shipping traffic through the critical oil artery, the Strait of Hormuz, sending oil prices soaring and raising fears of persistent inflation that will spur the Federal Reserve to keep interest rates unchanged through the rest of this year and part of next. The central bank had previously been expected to cut rates this year. Higher interest rates are typically bearish for gold, making it more expensive for holders of other currencies.
The likelihood of the Fed keeping rates steady rose after the U.S. reported April jobs figures Friday that surpassed economists’ expectations two days after the ADP private payrolls report out Wednesday beat economists’ estimates. The U.S. added 115,000 jobs nationwide last month, according to Labor Department data, almost double the 65,000 consensus forecast from economists. The unemployment rate held steady at 4.3%.
The latest inflation report, the consumer price index, is due out Tuesday with April data and will provide the latest guidance on the state of the economy. The producer price index follows on Wednesday.
The Fed last month held interest rates steady at 3.5% to 3.75%, as expected, but policymakers were unusually divided. About 96% of the investors tracked by the CME FedWatch Tool are betting on rates staying unchanged again in June. The Iran war has erased expectations that the Fed would cut interest rates this year. Most investors tracked by the tool now expect the central bank to keep U.S. interest rates unchanged until the latter half of next year.
The Fed has kept interest rates unchanged this year after three previous rate cuts. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts in 2024.
Front-month silver futures gained 5.8% last week to settle at $80.87 an ounce on Comex, and the July contract increased 0.9% Friday. The most-active contract touched a record above $115 in January. Silver lost 1.2% in April after dropping 20% in March and gaining 19% in February. It rose 141% last year. The July contract is currently up $5.730 (+7.09%) an ounce to $86.595 and the DG spot price is $85.87.
Spot palladium fell 3.7% last week to $1,493.00 an ounce after losing 0.9% Friday. Palladium rose 3.2% last month after tumbling 17% in March and gaining 8.8% in February. Palladium rose 74% last year. The current DG spot price is up $37.70 an ounce to $1526.00.
Spot platinum increased 2.4% last week to $2,058.80 an ounce after adding 0.9% Friday. It gained 1.3% in April after declining 17% in March and advancing 15% in February. Platinum increased 122% in 2025. The DG spot price is currently up $61.20 an ounce to $2114.50.
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