Gold extended its recent decline on Tuesday, trading around $4,534 to $4,543 per ounce as easing geopolitical tension in the Middle East and mounting expectations for a prolonged period of higher US interest rates weighed on the precious metal’s near-term outlook.
Spot gold was trading at approximately $4,534 per ounce at the start of the US session on Tuesday, marking a $40 fall from the same point on Monday. The metal has now fallen 5.78 percent over the past month, though it remains 40.98 percent higher than a year ago.
The session’s decline was largely driven by remarks from US President Donald Trump confirming he had paused a planned military strike on Iran following appeals from Gulf states including Saudi Arabia, Qatar and the United Arab Emirates. The move raised cautious hopes of renewed diplomatic engagement and reduced immediate safe-haven demand that had recently underpinned prices.
Markets remain wary, however. The US-Iran standoff over nuclear negotiations and the Strait of Hormuz blockade has not been resolved, and investors are treating any diplomatic softening as fragile rather than conclusive.
Gold has also faced pressure from hotter-than-expected US inflation data, which has led investors to rule out Federal Reserve rate cuts this year entirely while increasing speculation that policymakers could still raise rates before year-end. According to CME Group, the probability of a rate cut to 3.25 to 3.50 percent at the June meeting now stands at just 2.6 percent, with 97.4 percent of market participants expecting rates to remain unchanged.
Higher Treasury yields and a firmer US dollar have compounded the pressure on non-yielding assets such as gold, limiting upside potential despite ongoing geopolitical risks. JPMorgan has revised its 2026 average gold price forecast downward from $5,708 to $5,243 per ounce, reflecting the more hawkish monetary policy environment.
Traders are now focused on the release of Federal Open Market Committee (FOMC) minutes on May 20 and flash Purchasing Managers’ Index (PMI) data for manufacturing and services on May 21 as the next major signals on economic direction and future policy.
For Ghana, the world’s largest gold producer by some metrics and a country whose export revenues and fiscal position are closely tied to bullion prices, the sustained pullback from recent highs represents a significant development for government revenue projections and the mining sector’s near-term profitability.
Analysts say gold’s underlying support from geopolitical risk remains intact, but acknowledge that monetary policy dynamics are currently the dominant force shaping price direction in the short term.
