Gold Edges Higher Despite Inflation Worries

Gold climbed above $4,750 an ounce on Tuesday, approaching three-week highs even as heightened uncertainty in the Middle East and the prolonged shutdown of the Strait of Hormuz pushed oil prices higher and kept inflationary risk in focus. Bullion also drew support from a weaker dollar, which surrendered gains made earlier in the week. President Donald Trump said the US-Iran ceasefire was on “massive life support” after rejecting Tehran’s latest peace proposal, intensifying fears that the critical shipping route could remain effectively blocked for a prolonged period. Reports further suggested that President Trump is expected to meet with his national security team to consider a potential restart of military operations, while also revisiting plans to escort commercial ships through Hormuz. At the same time, investors awaited the latest US consumer inflation data for clues on how the Iran conflict has affected price pressures.

Gold edged up to $4,730 an ounce on Monday, recovering from early losses to reach its highest level in nearly three weeks, as investors awaited progress in US-Iran negotiations. President Donald Trump swiftly rejected Iran’s response to a peace proposal, calling it “totally unacceptable” and raising the risk of renewed conflict, while weekend strikes across the Middle East further threatened a fragile ceasefire established in early April. With Washington and Tehran still struggling to reach a diplomatic resolution, the Strait of Hormuz remains effectively blocked, keeping oil prices elevated and stoking inflation concerns. Investors have scaled back expectations for two US rate cuts this year, with forecasts now divided between limited easing and no cuts at all in 2026. Markets also turned their attention to Tuesday’s US CPI data and Trump’s two-day visit to China this week, where he is set to meet President Xi Jinping to discuss Iran, Taiwan, AI, and nuclear weapons.

Gold prices fell below $4,700 an ounce on Monday, giving back part of last week’s gains after President Donald Trump rejected Iran’s response to his peace proposal as “TOTALLY UNACCEPTABLE,” sustaining concerns over inflationary pressures. Reports indicated that Tehran had offered to move part of its highly enriched uranium stockpile to a third country, while refusing to dismantle its nuclear facilities. Meanwhile, renewed attacks across the Middle East over the weekend threatened to undermine a fragile ceasefire that took effect in early April. The Strait of Hormuz also remains effectively closed as Washington and Tehran continue to struggle toward a diplomatic resolution to the conflict, keeping energy prices elevated and intensifying inflation concerns. That strengthened expectations that central banks may raise interest rates further to contain price pressures, a development that tends to weigh on precious metals.