Gold Dips Amid Dollar Strength, Oil Surges

Gold prices experienced a decline on Monday, primarily influenced by a strengthening US dollar and escalating inflation concerns. The surge in oil prices, following events around the Strait of Hormuz, contributed significantly to these fears.

Spot gold prices were down approximately 0.8%, reaching their lowest point since April 13. US gold futures for June delivery also saw a decrease of 1.4%. Analysts noted that the allure of gold as a safe-haven asset was overshadowed by the US dollar's current role in the unfolding conflict.

Oil prices jumped around 5% due to worries about the potential collapse of the ceasefire between the United States and Iran, which also led to disruptions in traffic through the Strait of Hormuz. This rise in energy costs has heightened inflation concerns, impacting gold negatively as expectations of monetary tightening by the US Federal Reserve grow.

Despite the current downturn, some analysts believe gold retains the potential for recovery due to persistent structural demand drivers. Factors such as central bank buying, de-dollarisation trends, and currency debasement may continue to support bullion in the long term.

Other precious metals also saw declines, with silver losing 2.1%, platinum falling 1.7%, and palladium down 1.6%.