Shafaq News

Gold prices fell on Monday as the dollar firmed, while newsthe Strait of Hormuz is closed again pushed oil prices higher, revivinginflation fears.

Spot gold was down 0.7% at $4,794.21 per ounce, as of 0537GMT, after hitting its lowest since April 13 earlier in the session. U.S. goldfutures for June delivery fell 1.3% to $4,813.70.

"Gold prices are lower today after the U.S.-Iran warceasefire that markets celebrated last week ⁠appearedto be breaking down," said Ilya Spivak, head of global macro at Tastylive.

"That has revived the now-familiar 'war trade' dynamicswe've seen since the beginning of the conflict. Crude oil prices gained, whichechoed into inflation expectation and drove up both yields and the U.S.dollar."

The dollar index opens new tab strengthened, makinggreenback-priced bullion more expensive for other currency holders. Benchmark10-year U.S. Treasury yields gained 0.6%.

Oil prices jumped and stock markets wobbled as risingtension in the Middle East kept shipping in and out of the Gulf to a bareminimum.

The U.S. has seized an Iranian cargo ship that tried ⁠to run its blockade and Iransaid it would retaliate, raising the possibility that the ceasefire between thetwo countries might not last for even the two days it is set to remain inforce.

Tehran said it would not participate in a second round ofnegotiations that the U.S. had hoped to kick ⁠offbefore the ceasefire expires on Tuesday.

Gold prices have fallen about 8% since the U.S. and Israellaunched strikes on Iran in late February, on concerns that higher energyprices could stoke inflation and keep global ⁠interestrates higher for longer.

While gold is considered an inflation hedge, higher interestrates crimp demand for the non-yielding asset.

Meanwhile, gold demand during one of India's key buyingfestivals stayed muted on ⁠Sundayas record prices curbed jewellery purchases, offsetting a modest uptick ininvestment demand.

Among other metals, spot silver lost 1.3% to $79.75 perounce, platinum fell 0.8% to $2,086.90, and palladium was down 0.4% at $1,553.

(Reuters)

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