Gold prices fall as Strait of Hormuz standoff keeps rate hike expectations high

Gold fell on Monday, with the current standoff over the Strait of Hormuz keeping energy costs elevated, sustaining pressure on the Federal Reserve to raise interest rates further to counter stubborn inflation. Spot gold fluctuated around $4,240 an ounce, after falling more than 2% the previous week. Oil prices rose after U.S. President Donald Trump rejected Iran's proposal to reopen the Strait of Hormuz within seven days, prompting Iran to say it would not back down. However, Trump told Axios he expects talks to resume this week. The U.S.-Iran conflict has entered its eighth month, and Brent crude is up 70% year-to-date. As traders continuously adjust their expectations for Fed policy, gold has traded this month in a relatively narrow range of $4,230-$4,510 an ounce, well below the record high of nearly $5,600 set in January. Spot gold fell 1.1% to $4,237 an ounce. Silver dropped 1.4% to $63.4 an ounce, after falling 3% last week. Platinum and palladium also declined.