TLDR
- Gold fell over 1% to around $4,625/oz as US-Iran talks hit a wall
- Iran offered to reopen the Strait of Hormuz in exchange for lifting the US port blockade, but Washington is skeptical
- The Bank of Japan held rates steady but warned of rising inflation due to oil prices
- The Fed meets Wednesday in what may be Jerome Powell’s last meeting as Chair
- Gold has lost around 12% since the US-Iran conflict began in late February
Gold prices dropped sharply on Tuesday as diplomatic efforts to end the US-Iran war failed to make progress, and central banks around the world signaled concern about rising inflation.
Spot gold fell around 1.2% to $4,624.99 an ounce in Asian trade. Gold futures also dropped roughly 1% to $4,646.90 an ounce. Silver fell more steeply, dropping 3.3% to around $73 an ounce. Platinum and palladium also declined.
The Strait of Hormuz, a key waterway for global energy shipments, remains almost completely closed. Daily transits through the strait have fallen to near zero since the conflict began about eight weeks ago.
Iran put forward a new proposal earlier this week. Tehran offered to reopen Hormuz if Washington ended its blockade of Iranian ports. The White House is expected to respond in the coming days.
BREAKING:
🇺🇸🇮🇷 The Iran situation just changed overnight.
Trump cancelled peace talks Saturday.
Today he's reviewing a proposal to reopen Hormuz and end hostilities.China told their citizens to evacuate Iran before this weekend.
Pentagon planned for 5 months of war.Now a… pic.twitter.com/stt0tT0pfu
— Merlijn The Trader (@MerlijnTrader) April 27, 2026
However, reports indicate the Trump administration and its national security team are skeptical. A key sticking point is Iran’s request to delay talks about its nuclear program, which the US appears unwilling to accept.
Weekend negotiations between the two sides fell apart after both parties declined to meet in Pakistan. The status of future talks remains unclear.
Central Banks Add to Gold’s Pressure
The Bank of Japan kept its benchmark interest rate unchanged at 0.75% on Tuesday, but struck a hawkish tone. The BOJ raised its inflation forecast for fiscal 2026 and warned that further rate hikes are likely if inflation stays sticky.
The central bank pointed to higher oil and fuel prices as the main driver of rising prices. The comments put pressure on gold, which tends to lose appeal when interest rates are expected to rise.
The Federal Reserve wraps up its two-day meeting on Wednesday. Markets expect the Fed to hold rates steady, but there are concerns it could also take a hawkish stance given recent inflation data.
March inflation readings showed a sharp jump in price pressures in the US. The dollar held firm, adding to gold’s headwinds.
Powell’s Final Fed Meeting
Wednesday’s Fed meeting is expected to be the last chaired by Jerome Powell. His term ends on May 15.
Former Fed governor Kevin Warsh is set to replace him. Warsh testified before Congress last week during his confirmation hearing.
Traders are watching this week’s rate decisions across the US, European Union, UK, and Canada closely.
Marc Loeffert, a trader at Heraeus Precious Metals, said the extended ceasefire with Hormuz still blocked “prolongs market uncertainty.” He added that rising prices and economic stagnation could support gold over the longer term, but the near-term outlook remains under pressure from rate fears.
Gold has now lost around 12% of its value since the US-Iran conflict began at the end of February.
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