Gold prices have been finding it increasingly difficult to break through $4,900 over the past few weeks, with market players now digesting reports of new tensions between the United States and Iran over the Strait of Hormuz.
At 10 am, gold prices were at $4,803, down 0.54% since it opened early Monday in Asian trading.
A report from Bloomberg stated that Iran denied its participation in new peace talks with the United States.
The denial came just hours after President Donald Trump announced that US negotiators would travel to Pakistan to continue the second round of talks.
In a similar development, Iran announced the closure of the Strait of Hormuz to all commercial ships. The Iranian military also warned that any ship approaching the passage would be targeted, as long as the US naval blockade of Iranian ports was not lifted.
This situation further increased geopolitical tensions in the Middle East region.
At the same time, expectations for a US interest rate cut are increasingly shifting to a “higher for longer” stance.
This is driven by persistent inflationary pressures and ongoing geopolitical uncertainty. While gold is often a safe haven asset during a crisis, high interest rates are reducing its appeal as it does not offer interest returns.
Market focus now shifts to the US Retail Sales report due out on Tuesday. The data is expected to have increased by 1.3% month-on-month in March, compared to 0.6% in February.
However, if the actual figures show lower inflationary pressures, it could potentially weaken the US Dollar and support a rise in USD-based commodity prices.
