Gold Slips as Trump Rejects Iran Response

Gold prices fell below $4,700 an ounce on Monday, giving back part of last week’s gains after President Donald Trump rejected Iran’s response to his peace proposal as “TOTALLY UNACCEPTABLE,” sustaining concerns over inflationary pressures. Reports indicated that Tehran had offered to move part of its highly enriched uranium stockpile to a third country, while refusing to dismantle its nuclear facilities. Meanwhile, renewed attacks across the Middle East over the weekend threatened to undermine a fragile ceasefire that took effect in early April. The Strait of Hormuz also remains effectively closed as Washington and Tehran continue to struggle toward a diplomatic resolution to the conflict, keeping energy prices elevated and intensifying inflation concerns. That strengthened expectations that central banks may raise interest rates further to contain price pressures, a development that tends to weigh on precious metals.

Gold prices climbed above $4,720 per ounce on Friday, reaching their highest level since April 22 and heading for a weekly gain of over 2%, as optimism surrounding a potential US-Iran peace agreement eased concerns that persistent inflation could keep interest rates elevated for longer. Despite a recent exchange of fire between the US and Iran, the most significant test of their month-long ceasefire, Iran stated that the situation had stabilized, while US President Donald Trump confirmed the ceasefire remained "in effect." Investors also processed the latest US jobs report, which revealed the economy added 115,000 jobs last month, surpassing expectations of 62,000 and indicating continued strength in the labor market. Since the war began in late February, gold has dropped more than 10%, pressured by rising oil prices that fueled inflation worries and clouded the outlook for interest rates.

Gold rose above $4,700 an ounce on Friday after experiencing sharp volatility in the previous session, even as renewed clashes between the US and Iran weakened hopes for a near-term peace agreement and reignited inflation concerns. US Central Command said American forces intercepted Iranian attacks and launched defensive strikes while guided missile destroyers moved through the Strait of Hormuz, while stressing that the military does not seek further escalation. Meanwhile, the Trump administration is awaiting Iran’s response to a proposal aimed at reopening Hormuz and ending the nearly 10-week conflict, with reports indicating that Tehran is expected to respond through Pakistan within the next two days. Still, gold remains down more than 10% since the conflict began, as the effective closure of the Strait of Hormuz triggered a historic surge in energy prices, fueling inflation fears and strengthening expectations that central banks may need to raise interest rates.