Gold prices fell in the first trading session of the week after US President Donald Trump rejected Iran's latest peace proposal to end the 10-week conflict in the Strait of Hormuz, raising concerns about inflation and the prospect of interest rates remaining high.
Spot gold traded around 4,695 USD/ounce after increasing by about 2% last week. The market's recovery slowed down as Mr. Trump called Iran's latest response to the US peace proposal "completely unacceptable".
According to analysts, this development may cause concerns about inflation to continue to be maintained, while strengthening expectations that interest rates will remain high longer – a factor that often puts pressure on gold because this precious metal does not generate profits.
New attacks in the Middle East this weekend also show that the ceasefire starting from April 8 is still risky. A drone attack on Sunday caused a cargo ship to catch fire off the coast of Qatar in the Persian Gulf in a short time. The United Arab Emirates (UAE) and Kuwait also said they intercepted drones believed to be hostile.
The market is currently focusing its attention on US inflation data expected to be released on Tuesday. Analysts believe that new data is likely to continue to show that inflationary pressure in the US remains high, after the March consumer price index recorded the strongest monthly increase since 2022.
Meanwhile, data released on Friday showed that the US labor market continued to remain stable. New jobs in April increased for the second consecutive month, marking the first consecutive two-month increase in nearly a year, while the unemployment rate remained unchanged at 4.3%.
According to observers, positive labor data helps the Fed have more room to maintain current interest rates in the context that the agency continues to monitor inflation risks related to conflicts in the Middle East.
As of 08:24 Vietnam time, spot gold prices fell 0.35% to 4.704.13 USD/ounce. Silver prices rose slightly 0.3% to 80.65 USD/ounce, while platinum and palladium also went down. The Bloomberg Dollar Spot Index – a measure of the strength of the USD – rose 0.1% in the session.
