Gold prices moved lower during Asian deals on Monday as renewed tensions between the United States and Iran supported the U.S. dollar and pressured the precious metal.
By 4:10 pm AEST (6:10 am GMT), spot gold was down 0.9% at US$4,789.77 per ounce, slipping back below the $4,800 level after posting gains of 1% in the previous session.
The decline comes as geopolitical risks intensified over the weekend, raising concerns that the fragile two-week ceasefire between Washington and Tehran, set to expire on 22 April, could be undermined.
Tensions escalated following developments in the Strait of Hormuz, a critical global shipping route, prompting a rebound in the U.S. dollar as investors sought safety in the currency.
U.S. President Donald Trump said in a post on Truth Social that an “Iranian-flagged cargo ship named TOUSKA” attempted to breach the U.S. naval blockade, adding that “it did not go well for them”.
The incident, alongside the continuation of the U.S. blockade, drew a sharp response from Tehran.
A spokesperson for Iran’s Khatam Al-Anbiya central command said: “We warn that the armed forces of the Islamic Republic of Iran will soon respond and retaliate against this armed piracy and the U.S. military.”
Iranian state media also reported that Tehran had rejected a new round of peace talks, citing the ongoing blockade, despite Washington’s indication that negotiations would proceed.
The strengthening of the U.S. dollar has been further supported by a rebound in oil prices, which has reignited inflation concerns and reinforced expectations that the Federal Reserve may maintain a hawkish stance on interest rates.
On Friday, gold had rallied sharply as the dollar retreated from multi-week highs, after Iran signalled that the Strait of Hormuz would remain open during the ceasefire period between Israel and Lebanon, boosting broader risk sentiment.
However, the rapidly evolving geopolitical situation has reversed that trend, with markets now bracing for further volatility.
Looking ahead, investor attention will turn to upcoming U.S. economic data and central bank developments. Federal Reserve Chair-designate Kevin Warsh is scheduled to testify before the Senate Committee on Banking, Housing, and Urban Affairs in Washington on Tuesday.
Additionally, the release of U.S. March retail sales and preliminary April business PMI data will be closely monitored for further clues on the economic outlook and monetary policy direction.
