Gold fell after a second weekly loss as traders eyed progress toward a US-Iran deal and President Donald Trump’s plan to start guiding some ships through the Strait of Hormuz.
Bullion fell 0.9% in early European hours on Monday and traded at around $4,575 an ounce. Trump said in a social media post on Sunday that the US would begin guiding some ships not involved in the Iran conflict through Hormuz on Monday. Oil was steady as traders questioned the practicality of the plan. Track updates on Iran US war
Trump suggested on Saturday that the Islamic Republic’s latest peace proposal might not be enough to satisfy him. The conflict has kept energy prices high, dampening expectations of interest rate cuts by central banks, which is a negative for non-yielding bullion. Gold has fallen about 12% since the war began in late February.
Manav Modi, commodities analyst at Mumbai-based Motilal Oswal Financial Services Ltd., said a strong dollar and oil-driven inflation fears are leading to aggressive signals from major central banks.
Looking ahead, traders will focus on a loaded calendar of economic releases this week with the US Treasury Department announcing borrowing plans for the next three months, a series of Federal Reserve speakers and monthly employment data. The information should provide clues about the trajectory of rates and the US fiscal deficit.
Many market observers are still positive on the metal’s long-term outlook, which is supported by buyers who have continued buying despite the recent downturn. The latest data from the producer-funded World Gold Council showed central banks increased gold holdings in the first quarter at the fastest pace in more than a year, while Tether Holdings SA stepped up buying, making it the largest known holder of bullion in the world outside banks and nation states.
Spot gold fell 0.8% to $4,577.33 an ounce by 9:09 a.m. in London. Silver fell 1.4%, while platinum and palladium also declined. The Bloomberg Dollar Spot Index, an indicator of the US currency, was flat.
