Gold prices approach $4,549 per ounce

SadaNews - Gold maintained its losses as the United States and Iran exchanged fire in the Arabian Gulf on Monday, threatening the ceasefire that has been in place for four weeks, increasing inflation risks and interest rate hikes.

The metal traded near $4,549 per ounce, after dropping 2% on Monday. The U.S. military stated it thwarted Iranian attacks while facilitating the passage of two U.S.-flagged ships through the Strait of Hormuz.

The UAE also announced it intercepted missiles launched by Iran and attributed a drone strike from Iran to a large fire at the Port of Fujairah, marking a new escalation from Iran.

Oil jumps and yields rise

The tensions have disrupted the ceasefire that came into effect on April 8. Oil prices surged following the reports, while yields on 30-year Treasury bonds rose to their highest level since July, as traders increased bets that the Federal Reserve might have to raise interest rates to curb inflation, putting pressure on gold, which does not yield returns.

Kyle Rodda, an analyst at Capital.com, stated, "The escalating tensions in the Middle East and rising oil prices are putting pressure on gold due to the strength of the dollar and rising yields." He added, "If things escalate further, gold will continue to decline."

Markets look for interest rate signals

Traders are awaiting the U.S. Treasury Department's announcement this week regarding borrowing plans for the next three months, alongside a series of economic data, for additional indicators on the direction of interest rates.

Silver price

The price of silver was also trading near $73 per ounce.