WASHINGTON (dpa-AFX) - Gold prices have moved lower on Tuesday after U.S. President Donald Trump rejected Iran's response to a U.S. proposal to end the ongoing gulf war while analysts parsed U.S. inflation data.
Front Month Comex Gold for June month delivery has edged lower by $41.80 (or 0.88%) to $4,686.90 per troy ounce.
Front Month Comex Silver for June month delivery has inched lower by $0.279 (or 0.33%) to $85.375 per troy ounce.
The war between the U.S.-Israeli forces against Iran entered day number 74 today.
To facilitate negotiations between the two nations, Trump announced a ceasefire early in April for two weeks, which he extended later for an indefinite period.
With official discussions failing to yield a breakthrough, the U.S. administration offered a proposal to Iran to end the war and awaited its response.
After Iran sent its reply, through a couple of posts through Truth Social, Trump accused Iran of playing games with the U.S. for nearly 47 years and rejected Iran's plan as 'totally unacceptable.'
Later, Trump stated that he did not even finish reading Iran's documents fully and observed that the ceasefire with Iran now is on 'life support.'
Undeterred, Iran stated that it will respond to 'any aggression' by the U.S.
U.S. started the war accusing Iran of developing nuclear weapons and kept demanding Iran should halt all its nuclear programs. Iran has been refusing to concede to this which remains a sticking point in all diplomatic efforts to end the war.
The Strait of Hormuz, which Iran shut soon after the war began and the U.S. naval blockade on all ships entering or exiting Iran, have slammed the brakes hard on global oil trade.
The sharp exchange of rhetoric has diminished expectations of a breakthrough development through dialogue, and concerns of deeper escalation in the Middle East have increased.
As a result, crude oil prices soared further, and led by rising inflationary concerns, gold prices moved lower.
Citing aides close to Trump, CNN reported that the president is seriously considering restarting the military operations in Iran.
Trump has set off on a trip to China, where he will meet its President Xi Jinping and discuss various bilateral issues along with the ongoing gulf crisis.
Analysts are now pinning their expectations on this upcoming meeting to offer a resolution to the Middle East war as China has close friendly and business ties with Iran.
On the economic front, the Small Business Optimism Index released by the National Federation of Independent Business today held steady at 95.90 in April.
Indicating that job growth remained stable during the second half of April, the Automatic Data Processing Research Institute revealed that private employers in the U.S. added an average of 33,000 jobs per week over the four weeks ending April 25, up from the 30,250 weekly gain in the prior period.
The U.S. Bureau of Labor Statistics revealed that core consumer prices (excluding food and energy) rose by 0.4% from the previous month in April, exceeding market expectations of a 0.3% increase.
The annual core inflation rate (excluding food and energy) rose to 2.8% in April from 2.6% in the previous month.
Consumer prices increased by 0.6% month-over-month in April, in line with market expectations, following a 0.9% jump in March.
The annual inflation rate in accelerated to 3.8% in April, the highest since May 2023, and compared to 3.3% in March.
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