Gold prices fell Monday as the dollar strengthened, while the Strait of Hormuz closure lifted oil and stoked inflation fears.
Spot gold dropped 0.7 percent to $4,793.98 per ounce by 0351 GMT, hitting its lowest since 13 April earlier in the session. US gold futures for June delivery fell 1.4 percent to $4,813.60, reports Reuters.
“Gold prices are lower today after the US–Iran ceasefire that markets celebrated last week appeared to be breaking down,” said Ilya Spivak, head of global macro at Tastylive.
He added that the familiar “war trade” dynamics had returned, with crude gains feeding inflation expectations and lifting yields and the dollar.
The dollar index strengthened, making bullion more expensive for holders of other currencies, while benchmark 10‑year US Treasury yields rose 0.5 percent. Oil prices jumped and equities wobbled as shipping in and out of the Gulf slowed to a minimum.
The US seized an Iranian cargo ship attempting to break its blockade, prompting Tehran to vow retaliation and withdraw from a second round of talks Washington had hoped to launch before the ceasefire expires Tuesday.
Gold has fallen about 8 percent since late February, when US and Israeli strikes on Iran drove energy prices higher and stoked fears of prolonged inflation and tighter global interest rates. While gold is seen as an inflation hedge, higher rates dent demand for the non‑yielding asset.
In India, demand during a key buying festival stayed muted Sunday as record prices curbed jewellery purchases, offsetting a modest rise in investment demand.
Among other metals, spot silver fell 0.9% to $80.04 per ounce, platinum eased 0.5% to $2,093.56, while palladium held steady at $1,558.60.
