Gold Prices Decline as Hormuz Blockade Lifts Dollar and Oil
Gold hit a one-week low as a stronger dollar and $100 oil fueled inflation fears. Traders scaled back Fed rate cut bets amid the Hormuz blockade tensions.
Gold prices retreated to a near one-week low on Monday as a strengthening dollar and a significant rally in energy markets, specifically Brent Crude Oil and West Texas Oil, dampened investor sentiment. The surge in oil prices above the $100 mark followed a move by the United States to initiate a blockade of ports in Iran, sparking fresh inflation fears and leading market participants to recalibrate their expectations regarding potential interest rate cuts by the Federal Reserve.
Spot prices for the precious metal declined 0.4% to $4,730.75 per ounce by 0735 GMT, having touched a session low of $4,643 earlier in the day. Meanwhile, U.S. gold futures for June delivery saw a 0.7% decrease, trading at $4,753.30. The dollar index rose 0.3% as geopolitical tensions escalated following the breakdown of peace negotiations between Washington and Tehran.
