Gold drops as inflation worries linger on failed US-Iran talks
Gold prices touched a near one-week low on Monday, pressured by a stronger dollar, while a surge in oil prices following failed U.S.-Iran peace talks fuelled inflation worries and dampened expectations for Federal Reserve interest rate cuts this year.
Spot gold was down 0.7% at $4,716.70 per ounce, as of 0445 GMT, its lowest level since April 7. U.S. gold futures for June delivery fell 1% to $4,738.90.
The dollar strengthened 0.4%, while oil prices bounced back above $100 a barrel, as the U.S. Navy prepared a blockade of the Strait of Hormuz that could restrict Iranian oil shipments, following the U.S. and Iran's failure to reach a deal to end the war.
Iran's Revolutionary Guards responded by warning that military vessels approaching the Strait will be considered a ceasefire breach and dealt with harshly and decisively.
Spot gold has fallen more than 11% since the U.S.-Israeli war on Iran began on February 28. While inflation and geopolitical risks typically boost gold's appeal as a hedge, elevated interest rates weigh on the non-yielding metal.
Traders now see little chance of a U.S. rate cut this year, as higher energy prices threaten to feed into broader inflation and limit the scope for monetary easing.
Before the war in the Middle East began, there were expectations for two Fed rate cuts this year.
Among other metals, spot silver fell 2% to $74.35 per ounce, platinum lost 0.2% to $2,041.40, while palladium gained 0.7% to $1,530.80.
Reuters
Gold prices touched a near one-week low on Monday, pressured by a stronger dollar, while a surge in oil prices following failed U.S.-Iran peace talks fuelled inflation worries and dampened expectations for Federal Reserve interest rate cuts this year.
Spot gold was down 0.7% at $4,716.70 per ounce, as of 0445 GMT, its lowest level since April 7. U.S. gold futures for June delivery fell 1% to $4,738.90.
The dollar strengthened 0.4%, while oil prices bounced back above $100 a barrel, as the U.S. Navy prepared a blockade of the Strait of Hormuz that could restrict Iranian oil shipments, following the U.S. and Iran's failure to reach a deal to end the war.
Iran's Revolutionary Guards responded by warning that military vessels approaching the Strait will be considered a ceasefire breach and dealt with harshly and decisively.
Spot gold has fallen more than 11% since the U.S.-Israeli war on Iran began on February 28. While inflation and geopolitical risks typically boost gold's appeal as a hedge, elevated interest rates weigh on the non-yielding metal.
Traders now see little chance of a U.S. rate cut this year, as higher energy prices threaten to feed into broader inflation and limit the scope for monetary easing.
Before the war in the Middle East began, there were expectations for two Fed rate cuts this year.
Among other metals, spot silver fell 2% to $74.35 per ounce, platinum lost 0.2% to $2,041.40, while palladium gained 0.7% to $1,530.80.
Reuters
Gold prices touched a near one-week low on Monday, pressured by a stronger dollar, while a surge in oil prices following failed U.S.-Iran peace talks fuelled inflation worries and dampened expectations for Federal Reserve interest rate cuts this year.
Spot gold was down 0.7% at $4,716.70 per ounce, as of 0445 GMT, its lowest level since April 7. U.S. gold futures for June delivery fell 1% to $4,738.90.
The dollar strengthened 0.4%, while oil prices bounced back above $100 a barrel, as the U.S. Navy prepared a blockade of the Strait of Hormuz that could restrict Iranian oil shipments, following the U.S. and Iran's failure to reach a deal to end the war.
Iran's Revolutionary Guards responded by warning that military vessels approaching the Strait will be considered a ceasefire breach and dealt with harshly and decisively.
Spot gold has fallen more than 11% since the U.S.-Israeli war on Iran began on February 28. While inflation and geopolitical risks typically boost gold's appeal as a hedge, elevated interest rates weigh on the non-yielding metal.
Traders now see little chance of a U.S. rate cut this year, as higher energy prices threaten to feed into broader inflation and limit the scope for monetary easing.
Before the war in the Middle East began, there were expectations for two Fed rate cuts this year.
Among other metals, spot silver fell 2% to $74.35 per ounce, platinum lost 0.2% to $2,041.40, while palladium gained 0.7% to $1,530.80.
Reuters
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Gold drops as inflation worries linger on failed US-Iran talks
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