May 11 (Reuters) - Gold prices fell on Monday, as a lack of progress in U.S.–Iran peace negotiations pushed oil prices higher, fuelling concerns that elevated inflation could keep interest rates higher for longer.

FUNDAMENTALS

* Spot gold XAU= fell 0.6% at $4,687.49 per ounce, as of 0038 GMT.

* U.S. gold futures GCcv1 for June delivery lost 0.7% at $4,696.60.

* The dollar firmed, making greenback-priced bullion more expensive for holders of other currencies. USD/

* U.S. President Donald Trump on Sunday rejected Iran's response to a U.S. proposal for peace talks, dashing hopes for an imminent end to the 10-week-old conflict that has caused widespread damage in Iran and Lebanon, paralyzed maritime traffic in the Strait of Hormuz, and driven up global energy prices.

* Oil prices jumped $3 a barrel on Monday as the Strait of Hormuz remained largely closed, keeping global energy supplies tight. O/R

* The ongoing war with Iran and its shock to oil prices and supplies have rocketed to the top of the list of concerns for financial stability, according to a semi-annual Federal Reserve report released on Friday.

* Federal Reserve Bank of Chicago President Austan Goolsbee said on Friday the future of monetary policy could include interest rate increases.

* Meanwhile, China's gold production fell in the first quarter of 2026 versus the same period a year earlier, the China Gold Association said on Saturday, as safety inspections led some smelters to suspend production for maintenance.

* Gold demand in India was muted last week, as a price recovery prompted potential buyers to postpone purchases, while China premiums remained steady on safe-haven demand. GOL/AS

* Gold speculators raised net long position by 4,090 contracts to 95,664 in the week to May 5. CFTC/

* Spot silver XAG= was steady at $80.32 per ounce, platinum XPT= slid 0.9% to $2,037, and palladium XPD= was down 1% at $1,477.23.

DATA/EVENTS (GMT)
0130	China PPI YY Apr
0130	China CPI YY Apr
0645	France Reserve Assets Total Apr
1400	US Existing Home Sales Apr