Gold Eases as U.S. Plan to Blockade Hormuz Lifts Inflation Risks
Gold edged lower as inflation concerns grew after U.S. President Donald Trump ordered a blockade of the Strait of Hormuz, deepening the global energy supply shock. Bullion fell as much as 2.2% to trade below $4,650 an ounce before paring most of the decline.
Trump said Iran had reached out about peace talks as U.S. forces began the naval blockade. Iran blamed the weekend collapse of ceasefire negotiations on the U.S., and Tehran has not confirmed any further discussions.
Oil trimmed part of its early gains but still hovered near $100 a barrel as Trump spoke at the White House. The dollar and U.S. Treasury yields moved lower, offering some support to bullion.
Even so, elevated energy prices and the latest U.S. consumer price data have shifted investor attention back to inflation. U.S. money markets are pricing less than a one-in-five chance of an interest-rate cut by December. That backdrop is typically negative for non-yielding gold, which tends to benefit when borrowing costs fall.
“Events over the weekend clearly put the fragile ceasefire at risk and likely prolong the conflict,” said Paras Gupta, head of discretionary portfolio management in Asia at Union Bancaire Privée. He added that moves in gold were “less exaggerated” than earlier in the war. The Swiss private bank is gradually adding bullion to discretionary client portfolios after cutting exposure to 3% from around 10%.
Gold is down about 10% since the conflict began at the end of February, after early-week liquidity stress prompted some investors to sell to cover losses elsewhere. More recently, bullion has recovered some ground as rising concerns about slowing growth countered fears of higher rates. That shift should continue to provide some support despite Monday’s pullback, said Daniel Hynes, senior commodity strategist at ANZ Banking Group.
Spot gold was down 0.1% at $4,746.81 an ounce as of 1:33 p.m. in New York. Silver fell 0.6% to $75.38 an ounce, while platinum and palladium both rose.
Source : Newsmaker.id
