(Bloomberg) — Gold edged lower as efforts to resume peace talks between the US and Iran stalled, two months into a war that’s upended global markets and raised inflation risks.
Bullion was near $4,685 an ounce in early trading, having given up 2.5% in the previous week. US President Donald Trump canceled a planned trip by his top envoys to resume peace talks with Iran in Islamabad, while Tehran said it won’t negotiate as long as it’s being threatened.
Oil gained on Monday, as the Strait of Hormuz remained virtually impassable due to blockades set up by both countries. The energy-supply shock caused by the war has added to inflation risks, raising the likelihood that central banks will keep interest rates steady for longer or even hike them, which is a headwind for non-yielding bullion. Gold has lost about 11% since the conflict began at the end of February.
Traders are assessing the Federal Reserve’s path on borrowing costs after US Attorney Jeanine Pirro said on Friday she’s dropping an investigation into cost overruns at the US central bank, opening a path for Trump pick Kevin Warsh to become its next chair. Investors don’t expect Warsh to deliver the aggressive rate cuts urged by the president, but rather pursue a measured approach with gradual moves to lower rates.
Spot gold fell 0.5% to $4,686.45 an ounce at 6:15 a.m. in Singapore. Silver dropped 0.6% to $75.31 an ounce. Platinum and palladium also retreated. The Bloomberg Dollar Spot Index, a gauge of the US currency, gained 0.3% last week.
More stories like this are available on bloomberg.com
