Gold hovered near the $4,600-an-ounce mark on Monday, holding broadly firm despite slight weakness, as investors balanced inflation concerns, elevated oil prices and uncertainty over U.S.-Iran peace talks against bullion’s traditional safe-haven appeal. Spot gold was down about 0.2% to $4,606.38 an ounce in thin trading, while U.S. gold futures slipped 0.6% to around $4,617.40.
Markets are closely watching President Donald Trump’s newly launched effort to help stranded ships move through the Strait of Hormuz, a corridor central to global energy flows, while Tehran reviews Washington’s response to its latest 14-point proposal. The twin developments have kept hopes for diplomacy alive even as geopolitical risks remain elevated.
Gold’s resilience above $4,600 reflects the competing forces now shaping investor sentiment. On one hand, the prolonged Middle East conflict and disruption to oil shipments have sustained demand for defensive assets. On the other, surging energy prices have reinforced fears that inflation could remain stubborn, potentially forcing major central banks to keep interest rates higher for longer, a dynamic that can weigh on non-yielding assets like gold.
Analysts say bullion is effectively caught between geopolitical support and monetary policy pressure. While war-related uncertainty and broader financial stability concerns continue to underpin gold, hawkish signals from policymakers and oil-driven inflation risks are limiting stronger upside momentum.
The World Gold Council’s first-quarter data showing continued central bank gold accumulation also reinforces longer-term structural support for bullion, even as prices remain below earlier 2026 peaks after a sharp correction from record highs.
For now, investors are not simply pricing war or peace, but whether diplomacy can cool inflation and reduce the risk of prolonged higher interest rates without triggering deeper economic instability.
