Data shows that inflationary pressure in the United States has significantly increased, with gold and silver plunging into a decline.

April 7, as of the time of publication, spot gold fell sharply. London gold was down on the day as of the time of publication, down 0.75% to $4,624.6 per ounce. London silver was down more than 1% on the day, at $71.81 per ounce.

In terms of news, local time on Monday, U.S. President Trump said the seven-day deadline he set for an agreement with Iran is the final deadline, otherwise U.S. attacks would escalate again. The market is waiting for clear signals on where the Middle East conflict is headed. This Monday saw modest fluctuations; by the close that day, the gold futures price for June delivery on the New York Mercantile Exchange closed at $4,684.70 per ounce, up 0.11%; the silver futures price for May delivery closed at $72.847 per ounce, down 0.11%.

In addition, data released by the Institute for Supply Management (ISM) on Monday showed that the U.S. March ISM Services Prices Index rose to 70.7, the highest level since October 2022. The report noted that higher oil prices and fuel costs were the main factors driving the increase in prices. Also, the U.S. March services Purchasing Managers’ Index (PMI) fell to 54, below market expectations. The main reasons were weak employment and a slowdown in growth in business activity. Analysts believe that overall, U.S. services remained in expansion in March, but the pace of growth slowed. At the same time, inflationary pressure rose markedly. Transportation disruptions, higher oil prices, and potential supply-chain risks are pushing up costs and affecting international business, and they are also prompting companies to adjust their procurement and inventory strategies.

Cleveland Fed Chair Beth Hammack said in an interview that if the inflation rate continues to remain above the Federal Reserve’s 2% target, then an interest rate hike might be appropriate. This is the latest sign that some Fed policymakers are shifting from a stance favoring rate cuts. Hammack said she generally leans toward keeping the Fed’s benchmark interest rate unchanged “for a fairly long period of time.” She added that if higher gasoline prices lead to an economic slowdown and rising unemployment, the Fed may need to cut rates; but if inflation stays persistently high, the Fed may need to raise rates.

Analysts noted that if the Middle East conflict continues and oil prices keep climbing, intensifying inflationary pressure, it will further reinforce the Fed’s focus on inflation risks and may again trigger discussions about rate hikes. In a high interest-rate environment, the appeal of gold as a traditional safe-haven asset will decline.

Wells Fargo expects the Fed to keep interest rates unchanged in 2026, after previously forecasting two rate cuts this year. Citigroup expects the Fed to cut rates in September; previously, it expected a rate cut in June.

UBS released a field research report saying that although the gold price saw a pullback from late February to March, the underlying logic of China’s gold demand has not been weakened. Instead, it has continued to strengthen due to structural changes, and the long-term bullish foundation remains solid. Slowing silver demand and weak platinum imports reflect differentiation in industrial momentum, which in turn strengthens the safe-haven logic for gold. Overall, the current pullback may be a rational window to enter, but investors still need to be cautious.