TLDR
- Gold spot price slipped around 0.8% to approximately $4,699 an ounce on Tuesday
- Trump called Iran’s peace proposal response “a piece of garbage,” warning the ceasefire is on “massive life support”
- Higher oil prices and a stronger dollar are weighing on gold’s safe-haven appeal
- Silver dropped over 2% after surging 7%+ Monday on news of a liquidity crisis at a Peruvian state oil firm
- Markets await Tuesday’s U.S. consumer price index report for clues on Fed rate policy
Gold prices fell on Tuesday as a fragile ceasefire between the U.S. and Iran showed signs of strain. Investors pulled back from bullion while also bracing for key U.S. inflation data due later in the day.
Spot gold slipped around 0.8% to $4,699.16 an ounce. U.S. gold futures fell 0.5% to $4,707.20 an ounce.
President Donald Trump said Iran’s response to a U.S.-backed peace proposal was “a piece of garbage.” He described the ceasefire in the Strait of Hormuz as being on “massive life support,” raising fears of renewed conflict in the region.
BREAKING: President Trump says the Iran ceasefire is on MASSIVE life support after their dismal response to his offer
"I would say the ceasefire is on MASSIVE life support, where the doctor walks in and says, sir, your loved one has approximately a 1% chance of living."
"Right… pic.twitter.com/hdbolp4YdX
— Nick Sortor (@nicksortor) May 11, 2026
Iran pushed back, saying its armed forces were ready to respond to any act of aggression. Iranian officials said their demands — including sanctions relief, restored oil exports, and recognition of sovereignty over the Strait of Hormuz — were fair and legitimate.
Oil prices stayed elevated on Tuesday due to concerns about possible supply disruptions through the Strait of Hormuz. That waterway is a critical route for global crude shipments.
Why Rising Oil Is Hurting Gold
Higher oil prices are creating a problem for gold. Investors worry that sustained energy cost increases could push inflation higher, which might force the Federal Reserve to keep interest rates elevated for longer.
Higher interest rates reduce the appeal of gold because it pays no interest. That dynamic has put pressure on bullion even as geopolitical tensions remain high.
The U.S. dollar also firmed on Tuesday, with traders treating the greenback as a relative safe haven. A stronger dollar makes gold more expensive for buyers in other currencies, which adds further downward pressure.
Analysts at ING summed it up plainly. “Gold’s safe-haven appeal tends to perform best in a financial crisis or growth shock — when real yields fall and the dollar weakens. A supply-driven energy shock does the opposite,” they wrote.
Silver and Other Metals Also Drop
Silver fell more than 2% on Tuesday after surging over 7% the day before. Monday’s rally followed a report about a liquidity crisis at a state-owned oil firm in Peru, one of the world’s largest silver producers. Platinum dropped 2.7% to $2,078.23 an ounce.
Gold has had a volatile year overall. It hit a record high in late January before pulling back. The outbreak of the Middle East conflict has kept markets on edge ever since.
Markets are also watching an expected meeting between Trump and Chinese President Xi Jinping in Beijing later this week. Talks are expected to cover Iran, Taiwan, trade, artificial intelligence, and energy security.
Economists expect Tuesday’s consumer price index report to show a sharp rise in inflation. They point to the ripple effects of the Middle East war on manufacturing and farming costs as a key driver.
Christopher Wong, a strategist at Oversea-Chinese Banking Corp., described gold as trading “less like a straightforward safe haven and more as a macro risk proxy caught between oil, inflation, Fed-pricing, US dollar dynamics and risk sentiment.”
The next major catalyst for gold will likely be the CPI print and any developments from the Trump-Xi meeting later this week.
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