US Hormuz Blockade Sinks Gold, Fuels Inflation Fears

The US military will commence the blockade at 10 a.m. Eastern Time on Monday, targeting any vessel that has paid a toll to Iran for passage through Hormuz, a critical maritime chokepoint that previously handled one-fifth of the world's crude and liquefied natural gas.

This action by President Donald Trump immediately caused oil and natural gas prices to surge, while equity futures slid and a gauge of the dollar rose 0.5%, creating a significant headwind for gold. The spike in energy prices intensified inflationary risks, making it certain that central banks will delay interest rate cuts or even implement hikes, a negative development for non-yielding bullion.

Data from the Bureau of Labor Statistics released Friday showed March inflation climbed by the most in nearly four years, with gasoline prices responsible for nearly three-quarters of the monthly advance, reflecting the war's early economic impact.