By: Economy Middle east

Gold prices declined on Monday as the lack of progress in U.S.–Iran peace negotiations pushed oil prices higher, amplifying concerns that elevated inflation could keep interest rates higher for longer. 

Spot gold fell 0.25 percent to $4,674.49 per ounce as of 8:54 UAE time, while U.S. gold futures for June delivery lost 1.05 percent to $4,681.09.

In the UAE, gold rates were steady, with 24‑carat gold at AED568.25 and 22‑carat gold at AED526.25. Prices for 21‑carat and 18‑carat gold stood at AED504.50 and AED432.50 respectively, while 14‑carat gold was quoted at AED337.25.

The U.S. dollar strengthened, making dollar‑priced bullion more expensive for holders of other currencies and adding pressure on demand. U.S. President Donald Trump on Sunday rejected Iran’s response to a U.S. proposal for peace talks, undermining hopes for a near‑term end to the 10‑week‑old conflict that has caused extensive damage in Iran and Lebanon, paralysed shipping in the Strait of Hormuz, and pushed global energy prices higher; with the Strait still largely closed, oil prices jumped and global energy supplies remained tight.

Crude rally weighs gold

Rising crude prices risk fuelling stronger inflation, increasing the likelihood that interest rates will stay elevated, which typically weighs on non‑yielding assets such as gold even though it is often viewed as an inflation hedge. The ongoing war with Iran and the resulting oil‑price shock have moved to the top of financial‑stability concerns in a semi‑annual Federal Reserve report released on Friday, and investors are now awaiting April U.S. Consumer Price Index data due later this week for clearer signals on the Fed’s next policy moves.

China’s gold production fell in the first quarter of 2026 from a year earlier, the China Gold Association said, as safety inspections led some smelters to halt operations for maintenance. Among other precious metals, spot silver rose 1.33 percent to $80.45 per ounce, platinum slipped 0.27 percent to $2,053.65, and palladium declined 1.02 percent to $1,462.00.