Investors track gold slide as inflation fears mount

Gold prices held near $4,155 an ounce after three straight sessions of declines, as President Donald Trump renewed a threat to strike Iran and kept geopolitical risk in focus.

The metal was little changed Monday following last week’s slide, even as oil advanced on renewed concern about Middle East frictions. Investors are weighing whether the conflict-driven jump in energy costs will feed inflation and influence interest-rate expectations.

Trump warning shadows Switzerland negotiations

Tensions rose after Trump issued a fresh warning aimed at Iran, a move that threatened to complicate efforts to reach a durable settlement to the war that has unsettled global markets since late February.

Iranian media reported that Tehran had halted negotiations in response to the warning. People familiar with the matter said talks nonetheless continued into the early hours of Monday in Switzerland, signaling both sides remained engaged despite the public friction.

The latest round of diplomacy follows a memorandum of understanding signed last week by the parties, which began a de-escalation process and created a 60-day window for additional negotiations. Market participants have treated that timeline as a key near-term marker for assessing whether tensions ease or flare again.

Oil rises as markets track truce claims and Hormuz flows

Crude prices moved higher Monday as the Islamic Republic accused Israel of violating a truce in Lebanon, adding another layer of uncertainty to a region central to global energy supply. Despite the strain, oil continued to move through the Strait of Hormuz over the weekend.

Earlier in the conflict, the near-closure of the strait disrupted oil and natural gas flows and drove energy prices upward. That shock has been a primary channel through which the war has influenced broader asset markets.

For gold, the tension between safe-haven demand and the interest-rate outlook has become more pronounced. Geopolitical risk can support bullion, but higher energy prices can also lift inflation expectations and encourage tighter monetary policy.

Rate expectations weigh as bullion extends weekly slump

Gold has fallen for three consecutive weeks and is down more than 20% since the war began at the end of February. The latest price action suggests investors are increasingly focused on the costs of holding non-yielding assets in a higher-rate environment.

When inflation rises and central banks respond by raising borrowing costs, assets that generate no interest typically face a disadvantage. That dynamic can offset the metal’s defensive appeal, particularly when risk markets stabilize or when energy-driven inflation becomes the dominant concern.

The near-term direction for bullion may hinge on whether the Switzerland talks produce progress inside the 60-day window and whether energy flows through Hormuz remain uninterrupted. Traders will also monitor any further statements from Washington and Tehran that could alter risk sentiment and rate expectations.

Next steps include continued high-level negotiations, verification of truce compliance claims, and incoming signals on inflation pressures tied to energy. Together, those factors are likely to shape both oil volatility and the path of gold prices in the weeks ahead.