Gold Falls As Renewed US-iran Tensions Dampen Rate Cut Hopes

ReutersApr 13, 2026 12:40 PM

U.S. to blockade Strait of Hormuz
Gold drops to lowest since April 7
Oil prices jump back above $100 a barrel
Dollar climbs to near one-week high

April 13 (Reuters) - Gold prices declined on Monday as renewed fears of a wider Middle East conflict spurred by failed U.S.-Iran talks boosted oil prices, fueled inflation concerns and reduced expectations of U.S. Federal Reserve rate cuts this year.

Spot gold XAU= fell 0.8% to $4,711.51 per ounce as of 1206 GMT, after hitting its lowest since April 7 earlier in the day. U.S. gold futures GCcv1 for June delivery dropped 1.1% to $4,732.80.

The U.S. military said it will begin a blockade of all maritime traffic entering and exiting Iranian ports and coastal areas on Monday, following failed weekend talks to end the war with Iran.

Iran's Revolutionary Guards responded, warning that military vessels approaching the Strait of Hormuz would be considered a breach of the two-week ceasefire and dealt with harshly and decisively.

"With no US-Iran breakthrough over the weekend, the risk of a wider war is once again being priced in, threatening higher energy costs and a more aggressive Fed," said Zain Vawda, analyst at MarketPulse by OANDA.

Oil prices rose above $100 a barrel as markets assessed the U.S. blockade on the strait. O/R

The dollar rose to a near one-week high, making greenback-priced bullion more expensive for holders of other currencies. USD/

Spot gold has fallen more than 10% since the U.S.-Israeli war on Iran began on February 28. While gold is typically viewed as a hedge against inflation and geopolitical risks, elevated interest rates weigh on the non-yielding metal.

"If gold remains between (current) price levels, it could consolidate until a definitive resolution on Iran and the Strait of Hormuz is reached. A break of the $4,500/oz level could facilitate a move toward the $4,100/oz handle," Vawda added.

Among other metals, spot silver XAG= fell 2.3% to $74.14 per ounce, platinum XPT= lost 1.5% to $2,014.20, while palladium XPD= firmed 0.1% to $1,522.28.

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