Muscat: Gold prices fell more than one percent at the start of Asian trading today, as concerns over a potential closure of the Strait of Hormuz triggered a sharp spike in oil prices, reviving expectations of interest rate hikes to counter inflationary pressures. Spot gold declined 1.2 percent to $4,072.78 per ounce, while US gold futures for August delivery dropped 0.8 percent to $4,081.70 per ounce.
According to Oman News Agency, oil prices jumped nearly four percent, the dollar strengthened, and Asian equities retreated as fighting intensified in the Gulf region. Attention this week will focus on Federal Reserve Chair Kevin Warsh's first semi-annual testimony before Congress, along with key US economic data including consumer prices, producer prices and June retail sales, as investors seek fresh signals on the economy and the monetary policy path.
Gold traded at a significant discount in India last week due to price volatility, while demand in China remained stable after the People's Bank of China announced its largest monthly increase in gold reserves in more than two and a half years in June. Spot silver fell 1.6 percent to $58.89 per ounce, platinum declined 1.1 percent to $1,610.22 per ounce, and palladium dropped 1.3 percent to $1,260.15 per ounce.