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Geopolitics · Gold · Interest Rates · US Dollar
Gold price (XAU/USD) slumped to $4,775 during the early Asian session on Monday, as renewed tensions between the United States (US) and Iran over the critical Strait of Hormuz, coupled with shifting US interest rate expectations to a "higher-for-longer" stance, weighed on the precious metal.
Bloomberg reported on Sunday that Iran denied participation in new peace talks with the US, hours after US President Donald Trump announced negotiators would head to Pakistan for a second round. The Iranian military declared the Strait of Hormuz closed to all commercial vessels, threatening to target any ship approaching until the US lifts its naval blockade of Iranian ports.
Persistent inflation and geopolitical instability in the Middle East have solidified expectations for sustained high US interest rates, making non-yielding gold less attractive. Traders await the US Retail Sales report on Tuesday, projected to show a 1.3% MoM rise in March; a softer-than-expected inflation reading could weaken the US Dollar and support gold prices.
