International gold prices recorded a notable decline as geopolitical tensions in the Middle East and shifting expectations over inflation and interest rates influenced investor sentiment. The movement followed developments involving the United States and Iran, alongside rising crude oil prices, which have raised concerns about prolonged inflationary pressures.
According to market data, at 12:07 PM Bangladesh time on Monday (11 May), spot gold fell by 1.2 per cent to $4,657.89 per ounce. At the same time, June delivery gold futures dropped 1.4 per cent to $4,665.70 per ounce.
Gold and Related Precious Metals Prices
| Instrument | Price (per ounce) | Change |
|---|---|---|
| Spot Gold | $4,657.89 | -1.2% |
| Gold Futures (June delivery) | $4,665.70 | -1.4% |
| Silver (Spot) | $80.13 | -0.2% |
| Platinum (Spot) | $2,029.95 | -1.2% |
| Palladium (Spot) | $1,481.90 | -0.7% |
The decline in gold prices came after oil markets strengthened amid uncertainty surrounding diplomatic engagement between the United States and the Islamic Republic of Iran. Over the weekend, US President Donald Trump rejected a proposal from Iran aimed at restarting peace negotiations. This development has dampened expectations of a rapid resolution to a conflict that has continued for around ten weeks.
The ongoing conflict has already caused significant damage in both Iran and Lebanon, while also disrupting maritime traffic through the Strait of Hormuz, a key global energy transit route. The resulting supply constraints have contributed to rising crude oil prices, increasing concerns over sustained global inflation.
Market analyst Tim Waterer of KCM Trade noted that expectations of an immediate peace agreement have weakened. He added that renewed increases in crude oil prices have placed downward pressure on gold markets.
The Strait of Hormuz disruption continues to be a central factor in global energy supply concerns. As oil prices rise, economists warn that inflationary pressures may persist, potentially requiring central banks to maintain higher interest rates for longer periods. While gold is traditionally viewed as a hedge against inflation, higher interest rates tend to reduce its appeal due to its non-yielding nature.
In its semi-annual financial stability report, the Federal Reserve highlighted that the Iran conflict and its impact on global oil supply and pricing now represent one of the most significant risks to global financial stability.
In response to changing macroeconomic expectations, investment bank Goldman Sachs has revised its forecast for US interest rate cuts. The bank now anticipates rate reductions by December 2026 and March 2027, a significant delay from its earlier projections of cuts in September and December of the current year. The revision reflects expectations that elevated energy prices will sustain inflationary pressure.
Investors are currently focusing on the upcoming United States Consumer Price Index (CPI) report for April, which is expected to provide further signals regarding the direction of monetary policy.
Separately, the China Gold Association reported a year-on-year decline in China’s gold production during the first quarter of 2026. The reduction was attributed to temporary shutdowns at several smelting facilities due to safety inspections.
Market analyst Tim Waterer indicated that gold prices are likely to fluctuate within a range of $4,400 to $4,800 per ounce in the short to medium term, citing continued geopolitical uncertainty despite the absence of a formal peace agreement.
In broader commodity markets, other precious metals also recorded declines, reflecting weaker sentiment across the sector amid tightening financial conditions and energy market volatility.