Inflation worries, Middle East tensions drag gold lower

May 04, 2026 (MLN): Gold prices edged lower on Monday in subdued trading, as persistent inflation concerns continued to cloud the outlook for U.S. monetary policy.

Currently, spot gold is down 0.51% to $4,589.05  an ounce as of [12:21 am] PST, according to data reported by Mettis Global.

Uncertainty surrounding interest rate direction intensified after Jerome Powell concluded his eight-year tenure as head of the Federal Reserve last week, leaving rates unchanged but highlighting growing concerns about inflation., according to CNBC.

Higher interest rates typically weigh on non-yielding assets like gold, as investors shift toward interest-bearing instruments such as U.S. Treasury securities, which offer more attractive returns.

Although oil prices eased slightly, they remained above $100 per barrel, with markets closely watching developments around a possible U.S.-Iran peace agreement.

President Donald Trump announced that Washington would assist in freeing ships stranded in the Gulf amid the ongoing U.S.-Israeli conflict with Iran.

On the diplomatic front, Iranian state media reported that the United States had delivered its response to Tehran’s 14-point proposal through Pakistan, with Iranian authorities currently reviewing the terms.

In other precious metals, silver rose 0.5% to $75.69 per ounce, platinum gained 0.8% to $2,003.90, and palladium increased 0.5% to $1,532.87, reflecting modest gains despite broader market uncertainty.

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