Gold Prices Decline as Rising Oil and Stronger Dollar Pressure Markets
Gold prices moved lower in Asian trading on Monday after posting gains last week, as rising oil prices and a stronger U.S. dollar reduced investor demand for the precious metal.
Market sentiment shifted after President Donald Trump rejected Iran’s response to a U.S. peace proposal, increasing concerns about prolonged geopolitical tensions and higher global inflation.
Spot gold fell 1% to $4,669.82 per ounce, while U.S. gold futures declined 1.1% to $4,678.31 during early trading.
Despite Monday’s decline, gold had gained more than 2% last week amid earlier hopes for progress in U.S.-Iran peace negotiations.
Trump Rejects Iran Proposal as Strait of Hormuz Remains Disrupted
President Trump described Iran’s latest response to Washington’s proposed peace framework as “totally unacceptable,” reducing expectations for a near-term diplomatic breakthrough.
According to reports, Iran rejected U.S. demands to dismantle its nuclear facilities and refused to suspend uranium enrichment for 20 years.
Tehran instead proposed a gradual reopening of the Strait of Hormuz to commercial shipping while requesting that the United States lift restrictions on Iranian vessels.
Iran also reportedly agreed to dilute part of its highly enriched uranium stockpile while transferring the remaining material to a third country.
Oil Prices Surge Nearly 5%
Oil prices jumped nearly 5% after concerns grew that continued disruptions in the Strait of Hormuz could tighten global energy supplies.
The Strait of Hormuz remains one of the world’s most critical shipping routes for crude oil exports, and any prolonged closure threatens global supply stability.
Rising oil prices also increased fears that inflation could remain elevated worldwide, potentially forcing central banks to maintain higher interest rates for longer.
Higher interest rates generally reduce the attractiveness of non-yielding assets such as gold.
Strong U.S. Dollar Adds Pressure on Gold
The U.S. dollar strengthened in Asian markets following stronger-than-expected U.S. payrolls data released last week.
The solid employment report reinforced expectations that the Federal Reserve may delay interest rate cuts.
The U.S. Dollar Index rose 0.2% during Asian trading hours.
A stronger dollar makes gold more expensive for holders of other currencies, often reducing international demand for bullion.
Markets Focus on Trump-Xi Meeting and U.S. Inflation Data
Investor attention is now turning toward upcoming U.S. inflation data and President Trump’s scheduled visit to China later this week.
Trump is expected to meet Chinese President Xi Jinping to discuss key geopolitical and economic issues, including Iran, trade relations, and global energy security.
Markets are closely monitoring the meeting for potential developments that could influence commodity prices and broader financial sentiment.
Silver, Platinum and Copper Markets Mixed
Among other precious metals, silver prices edged 0.2% higher to $80.51 per ounce.
Platinum prices declined 1.4% to $2,030.04 per ounce.
Meanwhile, copper prices posted modest gains, with benchmark London Metal Exchange copper futures rising 0.3% to $13,608.33 per ton, while U.S. copper futures climbed 0.4% to $6.32 per pound.
