Gold prices fall amid inflation fears fueled by a protracted war with Iran and the crisis in the Strait of Hormuz

Gold prices continue to decline amid fears of rising inflation due to the protracted conflict between the US and Iran. Investors are monitoring the situation around the Strait of Hormuz, which remains effectively blocked for normal shipping. This is reported by Bloomberg, according to UNN.

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The price of gold is trading near $4,550 per ounce after falling nearly 4% last week. Markets are being pressured by rising oil prices, which increase the likelihood of further interest rate hikes by central banks. This negatively impacts gold, which does not yield interest income.

Markets fear a protracted energy crisis

According to Bloomberg, gold prices have already fallen by approximately 14% since the start of the war. Investors are simultaneously assessing the risks of accelerating inflation and a possible slowdown of the global economy due to the prolonged conflict in the Middle East.

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Additional market concern was triggered by a drone attack on a nuclear power plant in the United Arab Emirates, which called into question the stability of the ceasefire in the region.

Against this backdrop, global bond markets continue to fall, while government bond yields are rising. As of Monday morning, the spot price of gold rose by 0.2% to $4,547.65 per ounce, while silver rose by 0.7% after a sharp drop last week.

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