Gold and Silver Retreat on Iran Negotiation Standstill, Inflation Numbers

 

Gold and Silver Retreat on Iran Negotiation Standstill, Inflation Numbers

(Bullion News Network) – Precious metals retreated on Friday in one of the largest single-day pullbacks of the month. The spot price of gold shed more than $100 per troy ounce, falling below the $4,600 line. Silver was hit even harder, shedding nearly $7.50 per troy ounce after spending several days above $80/ozt. The price action heavily favored gold, driving the gold-silver ratio more than 6.75% higher.

Two big factors seem to be behind the market-wide retraction, which also drove platinum and palladium sharply lower. 

First, markets are not convinced that a US-Iran peace deal is on the way. U.S. President Donald Trump met with Chinese leaders this week, but the meeting yielded no definitive breakthrough on peace talk plans between the United States and Iran. The Strait of Hormuz waterway remained largely closed, and oil prices continued to climb throughout the week.

Second, inflation fears sent markets tumbling around the world. The Survey of Professional Forecasters now projects that inflation will hit a total of 6% in the second quarter, with rising energy prices playing an outsized role in the overall inflation figure.

Wall Street also slid on both bits of news. The Dow slid more than 500 points. The Nasdaq lost over 1.5%, while the S&P 500 shed 1.24%. 

For now, the Federal Reserve is expected to leave interest rates unchanged at its June meeting. That meeting will be the first headed by Kevin Warsh, who was confirmed by the U.S. Senate this week to serve as the next chair of the Fed. Warsh faces a challenging set of circumstances as he takes over the central bank, which was criticized by President Trump throughout 2025 for failing to cut interest rates as quickly as the White House wanted.

The last meeting of the Federal Open Market Committee (FOMC) saw four dissenters, the highest number of dissenting votes since 1992. While Stephen Miran voted to cut rates, the remaining three dissenters disagreed with the “rate cut bias” present in the committee’s rate cut decision statement. Some commentators speculated that this may have been an implicit signal to Warsh that these members do not plan to go along with a rapid easing of monetary policy.

CME FedWatch projects a probability of 99.2% that the FOMC will vote to keep rates steady at 3.5-3.75% at the June meeting, but any shift in market expectations could cause substantial volatility in the precious metals market. This was the trend throughout 2025, at least, but the US-Iran conflict paired with steady rates to mitigate the impact of rate cut speculation on metal futures for most of this year.

Over the weekend, traders will likely be paying close attention to any negotiations between the U.S. and Iran, although the prospects for a clear deal remain slim. Iranian foreign minister Abbas Araghchi said on Friday that the Iranian government has “no trust” in the United States, citing “contradictory messages” from Washington.

Aside from a fresh initial jobless claims report, the only major economic report hitting markets next week will likely be the April U.S. leading economic indicators. This report may provide a bit more insight into where the U.S. economy is heading, though the FOMC will ultimately rely heavily on employment data and inflation numbers to make its interest rate call in June.

Looking forward a bit more, the next major inflation report will be the April Personal Consumption Expenditures (PCE) report, which is slated for release on May 29th. This report could be highly impactful as the Federal Reserve assesses the U.S. economic situation, and a big shock in either direction could inject volatility into safe haven futures markets. 

Friday’s pullback erased gold’s gains throughout the week; the precious metal will end the American trading week down nearly 9% from last Friday’s closing price. Gold shed around 2.3% this week, displaying much less aggression on the chart compared to silver. The gold-silver ratio displayed extreme volatility, clocking a weekly high at nearly 60:1 on Friday and a low of below 54:1 on Wednesday during a silver price spike.