Gold Firms as Strait Closure Fuels Inflation Fears

Gold prices showed stability following a two-day decline, as investor focus remained locked on diplomatic talks between the United States and Iran. The ongoing indefinite closure of the Strait of Hormuz has been a significant factor, escalating inflation risks in global markets.

Crude oil prices have surged since late February, while gold has experienced a notable depreciation. Traders are now closely monitoring key interest-rate decisions from the US, European Union, the UK, and Canada in the coming days. The Bank of Japan recently maintained its benchmark rate, but a split vote suggested a potential future increase.

The energy supply shock from the Strait of Hormuz closure increases the likelihood that central banks may hold interest rates steady for an extended period or even implement hikes. Such a scenario typically acts as a headwind for non-yielding assets like gold, contributing to its recent price performance.