By: Middle east

Gold prices slipped Monday, weighed down by a firmer U.S. dollar, while a sharp rise in oil prices—sparked by the collapse of U.S.–Iran peace talks—reignited inflation concerns and weakened market hopes for Federal Reserve rate cuts this year.

Spot gold was down 0.65 percent at $4,717.47 per ounce as of 8:49 UAE time. U.S. gold futures for June delivery fell 1 percent to $4,742.

In the UAE, local gold rates recorded declines, with 24‑carat gold dropping AED5.25 to AED567.00 and 22‑carat easing AED4.50 to AED525.25.

21‑carat gold edged down AED4.50 to AED503.50, while 18‑carat slid AED4.00 to AED431.50. Meanwhile, 14‑carat gold fell AED3.25 to AED336.50.

The dollar strengthened about 0.4 percent even as oil prices climbed above $100 a barrel, after the U.S. Navy prepared to enforce a blockade of the Strait of Hormuz that could restrict Iranian oil exports following the breakdown of U.S.–Iran negotiations to end the conflict.

Iran’s Revolutionary Guards responded by warning that any military vessels approaching the Strait of Hormuz would be viewed as a breach of the short‑lived ceasefire and met with strong and decisive action.

Adjusting rate expectations

Spot gold has lost more than 11 percent since the U.S.–Israel-Iran conflict began on February 28.

Traders now see only a slim chance of a U.S. rate cut this year, as higher energy prices threaten to feed into broader inflation and narrow the room for monetary easing. Before the Middle East conflict erupted, markets had been pricing in two Fed rate cuts for 2026.

Although inflation often boosts gold’s appeal as a hedge, elevated interest rates undermine the non‑yielding metal, while a stronger dollar makes dollar‑priced bullion more expensive for holders of other currencies.

Among other precious metals, spot silver dropped 2.04 percent to $74.36 per ounce, platinum fell 0.72 percent to $2,050.40, while palladium edged up 0.60 percent to $1,516.00.