Investing.com – dropped on Monday, after U.S. President Donald Trump rebuffed Iran’s counteroffer to an American peace plan, keeping fears over energy-induced inflation pressures in play.
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By 06:12 ET (10:12 GMT), had slid by 1.1% to $4,662.11 an ounce, while gold futures had dipped by 1.3% to $4,672.95 an ounce.
According to Iranian state TV, Tehran issued a response to a U.S. plan to end their more than two-month old conflict, focusing on concluding the fighting on all fronts and demanding compensation for war damage.
Iran also stressed that it controlled the Strait of Hormuz, a vital shipping lane off the country’s southern coast through which roughly a fifth of the world’s oil flows. The strait has been all but shuttered during the conflict, and is now blockaded by both the U.S. and Iran.
Writing on social media within hours after Iran appeared to make its counteroffer, President Trump said: “I don’t like it — TOTALLY UNACCEPTABLE.” No further details were provided.
The U.S. has proposed bringing the war to a swift end, followed by more detailed negotiations on key issues, especially Iran’s nuclear ambitions.
Gold has struggled throughout the war, weighed down by expectations that soaring energy costs due to the conflict will drive up inflation and lead central bank to raise interest rates. Non-yielding assets like bullion tend to underperform in higher rate environments.
On Monday, again climbed, with benchmark hovering above $100 a barrel and well above pre-war levels.
At the same time, the has strengthened, buoyed by investors flocking to the greenback as a relative bastion from the geopolitical turmoil. Part of the reasoning behind the firmer dollar has revolved around the belief that the U.S., as a major energy exporter, may be relatively immune to energy shocks caused by the effective closure of the Strait of Hormuz.
A stronger dollar can make gold more expensive for overseas buyers.
Apart from the war, much of the focus in markets this week is turning to upcoming U.S. inflation data and Trump’s visit later this week to China, where discussions with Chinese President Xi Jinping are expected to touch on Iran, trade, and global energy security.
(Ayushman Ojha contributed reporting)
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