Gold slides on Hormuz fears as oil jumped about 4% and the dollar strengthened in early Asian trade on Monday.
Gold fell more than 1% after fears over the Strait of Hormuz pushed oil prices higher. The move revived expectations for elevated interest rates as markets weighed stronger inflation pressure. As a result, bullion came under pressure despite rising tension in the Gulf.
The source said oil built on an earlier 3% rise from Monday. That extended the market reaction to expanded Gulf strikes over the weekend. Meanwhile, uncertainty over how much traffic was still moving through the strait added to the move in oil.
Gold Slides on Hormuz Fears
The article said U.S. and Iranian forces exchanged heavy missile and drone attacks over the weekend. It added that Tehran targeted U.S. facilities in Gulf states on Sunday and again declared the strait closed. Later, a fresh round of Centcom-led strikes began on Sunday evening local time.
Oil rose as the new attacks added to concern over supply flows through the strait. The dollar also climbed, reflecting a shift toward a firmer monetary policy outlook. Consequently, rising oil, a stronger dollar and renewed rate expectations all weighed on gold.
Fed Report Adds Inflation Pressure
The Federal Reserve said in a monetary policy report delivered to Congress on Friday that U.S. inflation stepped up further this spring. The report linked that rise to tariffs, war-related energy costs from the Gulf conflict and AI-driven demand. Therefore, markets saw less room for near-term rate relief.
The source said that view reinforced the dollar’s strength and added another headwind for gold. Although geopolitical risk often supports bullion, the inflation effect dominated trading in this case. The article added that the link between the Gulf conflict and monetary policy could stay a main driver for gold in the sessions ahead.
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