Gold prices drop as traders eye US–Iran talks

Gold prices declined on Monday, extending a second consecutive weekly loss as markets monitored progress toward a potential US–Iran agreement and developments tied to US President Donald Trump’s plan for shipping in the Strait of Hormuz, News.Az reports, citing Bloomberg.

Spot gold dropped as much as 0.9% and was trading near $4,575 an ounce in early European trading hours.

The decline comes as investors weigh geopolitical signals and their potential impact on energy markets and global inflation expectations.

On Sunday, Trump said in a social media post that the US would begin guiding certain ships not involved in the Iran conflict through the Strait of Hormuz starting Monday.

Oil prices remained steady as traders questioned how the plan would be implemented in practice.

Over the weekend, Trump also suggested that Iran’s latest peace proposal may not be sufficient to meet US expectations. The ongoing conflict has kept energy prices elevated, reducing expectations for near-term interest rate cuts by central banks—an environment typically unfavorable for non-yielding assets such as gold.

Gold has fallen roughly 12% since the conflict escalated at the end of February, reflecting shifting risk sentiment and macroeconomic pressures.

Analysts say a stronger US dollar and inflation concerns linked to higher oil prices are contributing to a more cautious stance from major central banks. According to Manav Modi, a commodities analyst at Motilal Oswal Financial Services, these factors are prompting increasingly hawkish signals from policymakers.

Looking ahead, markets are focused on several key catalysts this week, including the US Treasury Department’s upcoming borrowing plans, a series of Federal Reserve speeches, and a dense schedule of economic data releases, highlighted by the US monthly employment report. These indicators are expected to provide further clarity on interest rate direction and fiscal conditions.

Despite recent weakness, some investors remain optimistic about gold’s longer-term outlook. Data from the World Gold Council shows central banks increased gold purchases at the fastest pace in over a year during the first quarter. Additionally, Tether Holdings SA has continued accumulating bullion, becoming the largest known non-sovereign holder of gold globally.

In broader precious metals trading, spot gold fell 0.8% to $4,577.33 an ounce as of 9:09 a.m. in London. Silver dropped 1.4%, while platinum and palladium also declined. The Bloomberg Dollar Spot Index was flat.

News.Az 

By Nijat Babayev