Spot gold fell 0.6% to $4,720.67 an ounce by 01:06 ET (05:06 GMT) on Monday, while gold futures declined 0.9% to $4,743.20 an ounce. The weakness extended to other precious metals, with spot platinum edging down to $2,047.06 an ounce and spot silver losing nearly 2% to $74.3975 an ounce.<\/p>\n
The retreat in bullion came as the U.S. dollar strengthened. The dollar index rose about 0.4% on Monday, supported by increased safe-haven demand following the failure of ceasefire talks between the U.S. and Iran. According to the report, gold\u2019s role as a safe haven was overshadowed by concerns over interest rates and prior strong gains in the metal through late-2025, which discouraged new buying.<\/p>\n
Marathon talks held in Pakistan over the weekend between Washington and Tehran produced little progress on de-escalation. The discussions highlighted disagreements over Iran\u2019s nuclear activities, the Strait of Hormuz, and Iran\u2019s support for militant groups in the Middle East.<\/p>\n
Following the breakdown in talks, U.S. President Donald Trump ordered a naval blockade of the Strait of Hormuz, later clarifying that the measure will specifically target Iranian ports and ships. The blockade is scheduled to begin at 10:00 ET (14:00 GMT) and could signal a further military escalation in Iran. Tehran largely rejected the U.S. plans. The Strait of Hormuz, a key energy shipping route, has remained largely closed since late February, providing limited prospects for reopening.<\/p>\n
At the same time, U.S. consumer price index (CPI) data added to the pressure on gold. CPI rose 3.3% year-on-year in March, below expectations of 3.4% but sharply higher than 2.4% in February. The increase was driven in part by higher fuel prices linked to the Iran war and the disruption of energy flows, heightening concerns about inflation globally.<\/p>\n
The inflation reading prompted further reductions in market expectations for Federal Reserve interest rate cuts over at least the next 12 months, according to CME Fedwatch. Expectations of steady rates are seen as negative for gold and other non-yielding assets and have been a key factor in gold\u2019s underperformance since the onset of the Iran war. U.S. producer price index (PPI) inflation data is due later this week.<\/p>\n
How did gold prices move on Monday?<\/strong> What impact did U.S.-Iran tensions have on financial markets?<\/strong> How did U.S. inflation data affect expectations for Federal Reserve policy?<\/strong> How did other precious metals perform?<\/strong>
Spot gold fell 0.6% to $4,720.67 an ounce, while gold futures declined 0.9% to $4,743.20 an ounce by 01:06 ET (05:06 GMT).<\/p>\n
The failure of ceasefire talks and the announcement of a U.S. naval blockade targeting Iranian ports and ships boosted safe-haven demand for the U.S. dollar, contributing to a stronger dollar and weaker gold prices.<\/p>\n
March CPI rose 3.3% year-on-year, leading markets to further scale back expectations for interest rate cuts over the next 12 months, a development seen as negative for non-yielding assets such as gold.<\/p>\n
Spot platinum edged lower to $2,047.06 an ounce, while spot silver fell nearly 2% to $74.3975 an ounce.<\/p>\n