Gold Falls, Dollar Strengthens as Hormuz Recloses and Oil Surges!
Gold prices weakened on Monday (April 20) amid a stronger US dollar and rising inflation concerns after the re-closure of the Strait of Hormuz fueled a rally in oil prices. Spot gold fell 0.5% to $4,807.60 per ounce (9:06 a.m. ET), while gold futures fell about 1.1% to $4,826.71.
The pressure on gold came as oil surged by about 7%, raising concerns that energy shocks could again spill over into inflation. Expectations that global central banks could maintain a tighter stance or delay easing interest rates have been a drag on non-yielding assets like gold.
Geopolitically, tensions escalated after President Donald Trump announced that the US fired on and seized an Iranian vessel attempting to circumvent the blockade, while both sides accused each other of violating the ceasefire. Trump said a US envoy was heading to Pakistan for further talks, but Iranian media reported that Tehran has not yet committed to further negotiations.
The market also highlighted that gold's reaction to the escalation appeared relatively limited, indicating that investors' focus remains predominantly on inflation and the direction of US interest rates. Correspondingly, the dollar index rose 0.1%, further pressuring gold by making bullion more expensive for buyers outside the US.
Despite the correction, gold remains within the $4,700–$4,900 range established over the past two weeks, reflecting the tug-of-war between hedging demand and concerns about prolonged high interest rates. The near-term direction will be heavily influenced by developments in ceasefire talks, oil movements, and US dollar dynamics and monetary policy expectations. (gn)*
Source: Newsmaker.id
