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High Interest Rates and Dollar Strengthening Press Down Gold Prices

Gold Focus:

US inflation pressures and expectations of prolonged high interest rates
Uncertainty in US–Iran negotiations and their impact on energy prices
Monday, May 4, 2026 – Gold prices opened weaker at $4,625 per troy ounce, continuing the pressure at the start of the week amid rising inflation concerns overshadowing the US monetary policy outlook. Market sentiment is influenced by expectations that the Fed will keep interest rates high for longer, after previously signaling a hawkish stance in the last meeting. Inflation pressures are reflected in the latest data, where the US PCE index rose 0.7% MoM in March. This condition supports the strengthening of the US dollar and rising bond yields, increasing the opportunity cost of holding non-yielding assets like gold.

On the geopolitical side, the market continues to monitor developments in negotiations between the US and Iran, which have yet to show certainty. US President Donald Trump’s statements regarding plans to release ships in the Strait of Hormuz as a humanitarian step, along with reports of response proposals through Pakistani mediators that have not yet provided clear conflict direction, keep energy prices high and reinforce global inflation risks. Several Fed officials, including Neel Kashkari and Austan Goolsbee, also emphasize that prolonged conflict could complicate the trade-off between inflation and growth, thus policy easing space becomes increasingly limited.

Overall, gold movements are currently under pressure from a combination of high inflation, interest rates, and dollar strength, although safe haven demand still provides limited support. Going forward, market participants will watch upcoming US economic data releases such as nonfarm payrolls, CPI inflation, and manufacturing and services activity data, which will be key catalysts in shaping Fed policy expectations. Additionally, geopolitical dynamics in the Middle East remain a key factor that could trigger short-term gold price volatility.

Technically, the nearest support level for gold prices is around $4,562 to $4,511, while the nearest resistance is at $4,662 to $4,711. If selling pressure increases, deeper support is seen at $4,411, while medium-term resistance is in the $4,811 area.