Gold prices experienced a decline on Tuesday as renewed U.S. military actions in Iran contributed to rising oil prices, heightening inflation concerns and expectations for prolonged higher interest rates. Spot gold fell by 1 percent to $4,524.73 per ounce by 0737 GMT. Meanwhile, U.S. gold futures for June delivery saw a slight increase of 0.1 percent, reaching $4,525.30.
U.S. Secretary of State Marco Rubio indicated that negotiating a deal with Iran could take “a few days,” dampening hopes for a swift resolution to the conflict following U.S. forces’ recent defensive strikes in southern Iran.
Kelvin Wong, a senior market analyst at OANDA, pointed out that while there appears to be a peace deal on the horizon, the damage inflicted on Middle Eastern oil production facilities could hinder a rapid restoration of oil supply globally. “The market has started to price in this situation, showing very high odds of an interestrate hike to come in this year,” Wong explained.
As tensions persist, Brent crude futures rose by 2 percent during Asian trading on Tuesday. The ongoing conflict and uncertainty surrounding a deal to terminate hostilities and ensure the security of the Strait of Hormuz remain significant issues.
Elevated crude oil prices are expected to exacerbate inflation and lead to sustained higher interest rates. Although gold is traditionally considered a hedge against inflation, rising interest rates typically exert downward pressure on non-yielding assets like gold.
Market expectations are increasingly leaning towards a U.S. Federal Reserve rate hike before the year’s end, with current data from CME Group’s FedWatch tool indicating a 56 percent likelihood of such a move by December.
In addition to gold’s decline, spot silver fell 2.5 percent to $76.12 per ounce, while platinum decreased by 1.1 percent to $1,945.16, and palladium slid 1.7 percent to $1,374.35.
Published on May 26, 2026.
