Gold prices fell more than 1% on Monday as the dollar firmed, while uncertainty over the U.S.-Iran peace talks pushed oil prices higher and revived inflation fears.
Spot gold was down 1.4% at $4,762.09 per ounce, as of 0055 GMT, after falling to its lowest level since April 13 earlier in the session.
U.S. gold futures for June delivery fell 2% to $4,781.90.
The dollar index strengthened, making greenback-priced bullion more expensive for other currency holders.
Oil prices jumped and stock markets wobbled as rising tension in the Middle East kept shipping in and out of the Gulf to a bare minimum, though traders were holding out hope for a resolution.
The U.S. has seized an Iranian cargo ship that tried to run its blockade and Iran said it would retaliate, raising the possibility that the ceasefire between the two countries might not last for even the two days it is set to remain in force.
Iran said it would not participate in a second round of negotiations that the U.S. had hoped to kick off before the ceasefire expires on Tuesday.
Federal Reserve Governor Christopher Waller said on Friday that while the U.S.-Israeli war with Iran will likely drive up near-term inflation, a fast end to the conflict would keep the door open to cutting interest rates later this year.
Meanwhile, gold demand during one of India’s key buying festivals stayed muted on Sunday as record prices curbed jewellery purchases, offsetting a modest uptick in investment demand.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.1% to 959.69 metric tons on Thursday.
Among other metals, spot silver fell 1.7% to $79.42 per ounce, platinum lost 0.8% to $2,086, and palladium was down 0.8% to $1,547.10.
