Gold hovering at the $4700 mark Monday morning as investors awaited further clarity on talks between the U.S. and Iran to resolve the almost two-month-old war.
Axios reported that Iran had offered the U.S. a deal to open the Strait of Hormuz, an artery for about a fifth of the world’s daily oil consumption before the conflict started, though the proposal would postpone nuclear talks. Over the weekend, U.S. President Donald Trump canceled planned travel by top aides to Pakistan for peace talks with Iran and Tehran said it wouldn’t negotiate while being threatened.
The conflict has roiled global markets, keeping oil prices elevated, though gold has declined as other assets have rallied. This is partly because perceived inflation risk is seen as likely to prompt the Federal Reserve to keep interest rates elevated for some time.
Investors will be closely watching this week’s Fed policy meeting for additional guidance and the economic outlook. All the investors tracked by the CME FedWatch Tool are betting on rates staying unchanged on Wednesday. Higher interest rates are typically bearish for gold, making the yellow metal a less attractive alternate investment than other assets.
A new Reuters poll of 31 analysts and traders over the past three weeks shows elevated annual gold price forecasts, siting strong central bank demand and economic uncertainty as support for the yellow metal. Those factors are expected to offset risks from surging inflation and hawkish policy bets due to the Middle East conflict. Respondents believe the metal’s rally will resume once geopolitical tensions ease. The poll showed a median gold forecast of $4,916 per troy ounce for 2026, the highest annual forecast in Reuters polls dating back to 2012. The latest forecast compares with $4,746.50 estimated three months ago.
June gold futures slid 2.8% last week to $4,740.90 an ounce on Comex, though the most-active contract rose 0.4% Friday. Bullion is up 1.3% this month after sliding 11% in March and climbing 11% in February. It rallied 64% last year. The June contract is currently down $29.30 (-0.62%) an ounce to $4711.60 and the DG spot price is $4691.90.
The Iran war has erased expectations that the Fed would cut interest rates this year. Most investors tracked by the CME FedWatch Tool now expect the central bank to keep U.S. interest rates unchanged the latter half of next year.
In addition to the Fed meeting, investors will be closely watching for the release of the next key inflation report, the personal consumption expenditures price index, which comes out on Thursday, the day after the next scheduled Fed interest rate announcement. The PCE release will include March figures, which means it will be the first report including a full month of data since the war began. It’s usually known as the Fed’s favorite inflation measure.
Fed policymakers last month kept interest rates unchanged again at 3.50% to 3.75%. 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.
Fed Chairman Jerome Powell’s term is also scheduled to end May 15, which could have some impact on interest rate activity. He and Trump have been at loggerheads over the president’s desire for low interest rates. The path to Trump’s appointed successor to Powell, Kevin Warsh, appears clear now that Sen. Thom Tillis of North Carolina said Sunday that he would no longer block Warsh’s confirmation.
Front-month silver futures fell 6.7% last week to settle at $76.94 an ounce on Comex, though the July contract increased 1.2% Friday. The most-active contract touched a record above $115 in January. Silver is up 2.7% this month after dropping 20% last month and gaining 19% in February. It rose 141% last year. The July contract is currently down $1.030 (-1.34%) an ounce to $75.910 and the DG spot price is $75.45.
Spot palladium declined 4.5% last week to $1,511.00 an ounce, though it advanced 1.9% Friday. Palladium is up 1% this month after tumbling 17% in March and gaining 8.8% in February. Palladium rose 74% last year. Currently, the DG spot price is down $20.40 an ounce to $1496.50.
Spot platinum lost 4.4% last week to $2,028.10 an ounce but rose 0.6% Friday. It’s up 3.1% this month after declining 17% in March and advancing 15% in February. Platinum increased 122% in 2025. The DG spot price is currently down $23.30 an ounce to $2011.10.
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