Gold fell more than 1% to below $4,800 an ounce on Monday, erasing the gains made in the previous week, as renewed hostilities in the Strait of Hormuz sent oil prices sharply higher and intensified inflation concerns. In the latest escalation, President Donald Trump said the US Navy fired on and seized an Iranian-flagged cargo vessel in the Gulf of Oman after it ignored orders to stop while leaving Hormuz. In response, Tehran targeted ships and moved to reassert control over the Strait, arguing that the US blockade of Iran-linked vessels violated the ceasefire agreement.
At the same time, Trump suggested there was still room for a deal ahead of another round of talks in Pakistan, although Iran sees little chance of an agreement. The prolonged conflict has triggered a historic energy supply shock, amplifying inflation risks and increasing the likelihood of additional central bank rate hikes, which has pressured gold. The precious metal remains down nearly 10% since the war began.
