Gold prices slip as Trump’s Iran remark lifts oil, stokes inflation fears
Gold prices fell in Asian trading on Monday after posting weekly gains, as surging oil prices and a stronger U.S. dollar dented bullion’s appeal following President Donald Trump’s rejection of Iran’s response to a U.S. peace proposal.
Spot gold slipped 1% to $4,669.82 an ounce by 02:35 ET (06:35 GMT), while U.S. Gold Futures also eased 1.1% to $4,678.31.
The yellow metal climbed more than 2% last week amid U.S.-Iran peace deal hopes.
Trump rejects Iran’s response; oil surges as Hormuz remains shut
President Trump described Tehran’s latest response to Washington’s peace framework as “totally unacceptable”, dampening hopes for a near-term breakthrough in U.S.-Iran negotiations.
Tehran has rejected U.S. demands to dismantle its nuclear facilities and would not suspend uranium enrichment for 20 years, the Wall Street Journal reported.
In its multi-page counter-proposal, Iran proposed an end to the war and a gradual reopening of the Strait of Hormuz to commercial vessels, with the U.S. also lifting its blockade of Iranian ships.
The report added that Tehran accepted that some of its highly enriched uranium would be diluted and the rest transferred to a third country.
Oil prices surged nearly 5% in early trade amid continued Strait of Hormuz closure.
Higher oil prices reinforced concerns that inflation could remain elevated globally, potentially forcing central banks, including the U.S. Federal Reserve, to keep interest rates higher for longer. That reduced demand for non-yielding assets such as gold.
Trump-Xi meeting scheduled this week
The dollar also strengthened in Asian trade after stronger-than-expected U.S. payrolls data last week supported expectations the Fed would delay rate cuts. A firmer dollar makes gold more expensive for holders of other currencies.
The US Dollar Index traded 0.2% higher in Asian hours.
Investor focus is now turning to upcoming U.S. inflation data and Trump’s visit to China later this week, where discussions with Chinese President Xi Jinping are expected to include Iran, trade, and global energy security.
Among other precious metals, silver prices edged up 0.2% to $80.51 per ounce, while platinum declined 1.4% to $2,030.04/oz.
Benchmark Copper Futures on the London Metal Exchange edged up 0.3% to $13,608.33 a ton, while U.S.Copper Futures rose 0.4% to $6.32 a pound.
