Gold Dips Amid Middle East Tensions and Inflation Pressures

2026-05-12 12:55 By Joana Ferreira 1 min. read

Gold fell below $4,690 an ounce on Tuesday amid heightened Middle East uncertainty and the prolonged shutdown of the Strait of Hormuz, which pushed oil prices higher and kept inflation risks in focus.

A rebounding dollar also weighed on bullion.

US President Donald Trump stated that the US-Iran ceasefire was on "massive life support" after rejecting Tehran’s latest peace proposal, raising concerns that the critical shipping route could remain blocked for an extended period.

Reports indicate Trump is set to meet with his national security team to discuss a potential restart of military operations and revisit plans to escort commercial ships through the Strait.

Meanwhile, US inflation accelerated to 3.8% in April, the highest since May 2023 and above forecasts of 3.7%, while the core rate also exceeded expectations at 2.8%.

The data complicates the Federal Reserve’s outlook, with traders now pricing in over a 70% chance of a rate hike by April 2027 and ruling out cuts through year-end.



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