Gold Falls to Near $4,650 as Oil Surge, US–Iran Tensions Hit Fed Cuts

• Gold declines as rising energy prices boost inflation, dampening expectations for Fed and global central bank rate cuts.
• WTI jumps about 8.5% as US–Iran conflict escalates, raising supply disruption concerns.
• CENTCOM said forces will begin blockading all maritime traffic to and from Iranian ports at 10 AM ET Monday.

Gold price (XAU/USD) moves little after opening at a gap down, hovering around $4,670 per troy ounce during the Asian trading hours on Monday. The non-yielding metal struggles as rising energy prices fuel inflation risks, reducing expectations for rate cuts by the US Federal Reserve (Fed) and other major central banks.

West Texas Intermediate (WTI) oil price has opened the week with a bullish gap, climbing roughly 8.5%, and is trading around $98.00 per barrel at the time of writing. The latest surge in oil prices is mainly driven by the re-escalation of the conflict between the United States (US) and Iran.

US President Donald Trump said Washington would begin blockading all ships entering or leaving the Strait of Hormuz after the announcement of the failure of US-Iran peace talks in Islamabad. Moreover, the US Central Command (CENTCOM) said forces will begin blockading all maritime traffic entering and exiting Iranian ports at 10 AM ET (14:00 GMT) on Monday.

Friday’s hot US Consumer Price Index (CPI) data reinforced the Fed’s higher-for-longer stance. The US Bureau of Labor Statistics (BLS) reported that annual CPI rose to 3.3% in March from 2.4% in February, matching expectations. On a monthly basis, CPI increased 0.9% after 0.3% previously. Meanwhile, core CPI rose 0.2% month-over-month and 2.6% year-over-year.