Escalating tensions between the US and Iran and persistent inflation concerns have led to a stabilization in gold prices and a significant rise in silver prices.
2026-05-12 01:33:14
On Monday (May 11), spot gold prices stabilized and rebounded, boosted by a renewed escalation of the diplomatic deadlock between the US and Iran and a rebound in oil prices, while silver prices surged. Spot gold prices traded between $4,727 and $4,730 per ounce, up about 0.3%; US gold futures were at $4,740, up 0.2%; and spot silver prices were at about $85 per ounce, a daily increase of nearly 6%.
US-Iran negotiations are deadlocked, and geopolitical risk premiums remain high.
US President Trump said Monday he would discuss the future of the war with Iran with his national security team, warning that the ceasefire agreement was "precarious" and describing it as "weak," and condemning Iran's latest response as "completely unacceptable" on social media. Iran, on the other hand, insists on US compensation for war losses and emphasizes its sovereignty over the Strait of Hormuz. Iranian Foreign Ministry spokesman Bagai called Tehran's proposal "generous and responsible" and accused Washington of making "unreasonable demands."
The continued deadlock in negotiations fueled concerns about supply disruptions in the Strait of Hormuz, driving a rebound in oil prices—Brent crude was at around $104.32 a barrel, up about 3%; WTI crude was at around $98.40, up about 3.2%, after both had fallen about 6% last week due to expectations of ceasefire negotiations.
Daniel Pavilonis, senior market strategist at RJO Futures, noted, "The market is currently highly focused on expectations of whether the Strait of Hormuz will reopen, and is generally digesting the backdrop of continued high energy prices."
Inflationary pressures limit upside potential for gold
Rising oil prices continue to strengthen market expectations of "maintaining high interest rates for a longer period," putting pressure on gold, which does not generate returns. The market currently widely expects the Federal Reserve to keep interest rates unchanged this year, but the CME FedWatch tool shows that the probability of a rate hike in December has risen to about 20%. Several global brokerages have also lowered their expectations for two rate cuts this year, and the divergence in forecasts is widening, with some institutions believing that there may be no rate cuts at all in 2026.
Market focus will shift to the US April CPI data to be released on Tuesday: it is expected to rise 0.6% month-on-month and 3.7% year-on-year (previous value 3.3%); core CPI is expected to rise 0.3% month-on-month and 2.7% year-on-year.
In response, Jim Wyckoff, a market analyst at the U.S. Gold Exchange, said, "The current rise in gold prices is mainly driven by bargain hunting and positioning ahead of this week's inflation data release."
Multiple factors support precious metals
While upside potential is limited, downside risks for gold are also limited. Continued geopolitical uncertainty supports safe-haven demand, while buying from central banks, retail investors, and investment firms provides a floor for gold prices. Furthermore, the market is also focused on Trump's two-day visit to China this week—where he will meet with Chinese President Xi Jinping to discuss issues such as Iran, Taiwan, artificial intelligence, and nuclear weapons.
It is worth noting that Indian Prime Minister Modi's call for Indian citizens to suspend gold purchases for a year to protect foreign exchange reserves caused a sharp decline in Indian jewelry stocks. India is the world's second-largest gold consumer, and this move may put potential pressure on market sentiment.
Technical Analysis: Gold prices maintain a short-term bullish trend.
(4-hour chart of spot gold source: EasyForex)
The bullish trend in spot gold on the 4-hour chart remains solid. Prices continue to trade above the Bollinger Band middle line (approximately $4708), and the moving average system (MA20, MA100) is also in a bullish alignment, providing support for prices.
In terms of momentum, the RSI indicator is currently around 56, which is in the neutral to strong range. There is no obvious overbought signal or indication of momentum exhaustion. The ADX indicator is around 27. Although the trend is confirmed, the value is still around 25, indicating that the strength of the current trend has not yet reached the level of "strong one-sided". Further attention should be paid to breakout signals.
Regarding resistance and support, the first target on the upside is the upper Bollinger Band (approximately $4,760). A break above this level could open up further upside potential. On the downside, the first support level to watch is the middle Bollinger Band at $4,708, followed by the $4,664 level where the lower edge of the previous consolidation platform intersects with the 50-day moving average. A breach of this range would weaken the effectiveness of the current bullish trend.
US-Iran negotiations are deadlocked, and geopolitical risk premiums remain high.
US President Trump said Monday he would discuss the future of the war with Iran with his national security team, warning that the ceasefire agreement was "precarious" and describing it as "weak," and condemning Iran's latest response as "completely unacceptable" on social media. Iran, on the other hand, insists on US compensation for war losses and emphasizes its sovereignty over the Strait of Hormuz. Iranian Foreign Ministry spokesman Bagai called Tehran's proposal "generous and responsible" and accused Washington of making "unreasonable demands."
The continued deadlock in negotiations fueled concerns about supply disruptions in the Strait of Hormuz, driving a rebound in oil prices—Brent crude was at around $104.32 a barrel, up about 3%; WTI crude was at around $98.40, up about 3.2%, after both had fallen about 6% last week due to expectations of ceasefire negotiations.
Daniel Pavilonis, senior market strategist at RJO Futures, noted, "The market is currently highly focused on expectations of whether the Strait of Hormuz will reopen, and is generally digesting the backdrop of continued high energy prices."
Inflationary pressures limit upside potential for gold
Rising oil prices continue to strengthen market expectations of "maintaining high interest rates for a longer period," putting pressure on gold, which does not generate returns. The market currently widely expects the Federal Reserve to keep interest rates unchanged this year, but the CME FedWatch tool shows that the probability of a rate hike in December has risen to about 20%. Several global brokerages have also lowered their expectations for two rate cuts this year, and the divergence in forecasts is widening, with some institutions believing that there may be no rate cuts at all in 2026.
Market focus will shift to the US April CPI data to be released on Tuesday: it is expected to rise 0.6% month-on-month and 3.7% year-on-year (previous value 3.3%); core CPI is expected to rise 0.3% month-on-month and 2.7% year-on-year.
In response, Jim Wyckoff, a market analyst at the U.S. Gold Exchange, said, "The current rise in gold prices is mainly driven by bargain hunting and positioning ahead of this week's inflation data release."
Multiple factors support precious metals
While upside potential is limited, downside risks for gold are also limited. Continued geopolitical uncertainty supports safe-haven demand, while buying from central banks, retail investors, and investment firms provides a floor for gold prices. Furthermore, the market is also focused on Trump's two-day visit to China this week—where he will meet with Chinese President Xi Jinping to discuss issues such as Iran, Taiwan, artificial intelligence, and nuclear weapons.
It is worth noting that Indian Prime Minister Modi's call for Indian citizens to suspend gold purchases for a year to protect foreign exchange reserves caused a sharp decline in Indian jewelry stocks. India is the world's second-largest gold consumer, and this move may put potential pressure on market sentiment.
Technical Analysis: Gold prices maintain a short-term bullish trend.
(4-hour chart of spot gold source: EasyForex)
The bullish trend in spot gold on the 4-hour chart remains solid. Prices continue to trade above the Bollinger Band middle line (approximately $4708), and the moving average system (MA20, MA100) is also in a bullish alignment, providing support for prices.
In terms of momentum, the RSI indicator is currently around 56, which is in the neutral to strong range. There is no obvious overbought signal or indication of momentum exhaustion. The ADX indicator is around 27. Although the trend is confirmed, the value is still around 25, indicating that the strength of the current trend has not yet reached the level of "strong one-sided". Further attention should be paid to breakout signals.
Regarding resistance and support, the first target on the upside is the upper Bollinger Band (approximately $4,760). A break above this level could open up further upside potential. On the downside, the first support level to watch is the middle Bollinger Band at $4,708, followed by the $4,664 level where the lower edge of the previous consolidation platform intersects with the 50-day moving average. A breach of this range would weaken the effectiveness of the current bullish trend.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
