Trump's challenge to Iran shakes markets: Oil rises, gold falls

U.S. President Donald Trump's negative response to the latest proposal submitted by Iran to end the war in the Middle East has stirred global oil prices. This development has strengthened market expectations that transit through the strategically important Strait of Hormuz will remain blocked for a longer period.

SHARP RISE IN OIL PRICES

In this rapid surge in the oil market, the price of Brent crude rose by 4.2 percent to reach 105.54 dollars per barrel, while U.S. crude oil also surpassed the 99-dollar threshold, nearing record levels. In a post on social media, U.S. President Trump clearly expressed his reaction to Iran's proposal, calling it "COMPLETELY UNACCEPTABLE."

GOLD FALLS, INTEREST RATE CONCERNS RISE

The gold market, which began the new week with a decline, felt the impact of the stalled peace process between the U.S. and Iran. While the rise in oil prices has increased global energy costs, this situation has reinforced expectations that inflation may be persistent and has heightened concerns that interest rates will remain at high levels for a long time.

Spot gold prices fell by 0.6 percent to 4,684.32 dollars per ounce, while U.S. gold futures for June delivery also declined by 0.8 percent to reach the 4,692.70 dollar level.

STRAIT OF HORMUZ PRESSURES MARKETS

U.S. President Donald Trump's rejection of Iran's proposal for the peace table has diminished hopes that the war, which has been ongoing for approximately 10 weeks, will end in the short term. In particular, the clashes in the Strait of Hormuz have significantly disrupted maritime transport, creating upward pressure on energy prices.

Tim Waterer, Chief Market Analyst at KCM Trade, commented, "Expectations for a peace deal in the near term are fading, and gold is feeling the pressure from the renewed rise in oil prices."

FED REPORT HIGHLIGHTS RISKS

As oil prices continue to rise due to disruptions in global energy supply chains, supply-side constraints persist. The inflation risk brought about by the increase in energy prices raises expectations that a high-interest-rate policy may remain on the agenda for longer. Although gold is generally preferred as a safe haven against inflation, the high-interest-rate environment continues to exert pressure on this asset.

The U.S. Federal Reserve (Fed) report released last Friday indicated that the ongoing war in Iran and regional conflicts pose a serious threat to financial stability due to their impact on oil prices and supply.

ALL EYES ON U.S. INFLATION DATA

Investors are now focused on the U.S. consumer inflation data for April, which will be released this week. This data will play a significant role in determining the Fed's monetary policy for the coming period.

Additionally, it was reported that China produced less gold in the first three months of 2026 compared to the same period last year.

Tim Waterer, "In the short to medium term, it is likely that gold will continue to trade in the range of $4,400 to $4,800 in an environment of a ceasefire without a peace agreement," he assessed.

MIXED TREND IN PRECIOUS METALS

It was not just gold; there was activity across all precious metals. Spot silver rose by 0.7 percent to $80.88 per ounce, while platinum fell by 0.6 percent to $2,042.71. Palladium traded at $1,484.99, marking a 0.4 percent loss in value.