WASHINGTON (dpa-AFX) - Gold prices have edged lower on Friday as the ongoing Strait of Hormuz blockade renewed oil supply and inflationary concerns shadowing the cooling provided by the two-week U.S.-Iran ceasefire.
Front Month Comex Gold for June month delivery has moved down by $28.90 (or 0.60%) to $4,789.10 per troy ounce.
Front Month Comex Silver for June month delivery has crept up by $0.036 (or 0.05%) to $76.763 per troy ounce.
After the two-week ceasefire announcement by the U.S. and Iran late Tuesday, airstrikes have been reduced in the gulf region.
The Islamic Revolutionary Guards Corps confirmed that they have not carried out any attacks.
However, the issues surrounding the Strait of Hormuz remain unsolved.
The narrow waterway running between Iran and Oman connects the Persian Gulf and the Arabian Sea, serving as a critical chokepoint for ships carrying oil, gas, and other commodities to the rest of the world, meeting nearly 20% of global oil demand.
The blockade of the strait by Iran led to a spike in oil prices since February 28, crippling major economies of the world due to consequential inflationary effects.
While agreeing to the truce, U.S. President Donald Trump wanted Iran to reopen the strait and allow secure and safe passage for all tankers.
Iran reportedly provided ship-owners a navigational map indicating a safe route to avoid the Iran-planted sea mines.
Though concerns of Iranian attacks abated after the ceasefire agreement, risks of sea-mine-linked events are preventing ships to venture again.
In addition, Iran apparently collected a toll charge (around $2 million) from all the vessels that transited via the waterway.
As per the United Nations Convention on the Law of the Sea (UNCLOS), charges cannot be levied on natural waterways like the Strait of Hormuz unlike man-made seaways like the Suez Canal or the Panama Canal.
ABC News reported that Trump expressed his displeasure on Iran's toll collection and asked Iran to stop it immediately.
Surprisingly, Trump hinted that the U.S. was planning to manage the strait as a 'joint venture' to ensure a smooth and secure shipping route.
As of now, traffic is only a fraction of what was before the conflict began on February 28.
Through his Truth Social platform, Trump condemned Iran's hold on the strait as dishonorable and stated that oil will start to flow soon with or without Iran's support.
Trump's economic adviser Kevin Hassett stated that the seaway could reopen within the next two months.
Ship owners are expecting more clarity on the prevailing scenario.
Carrying guidelines from Trump, a team of negotiators from the U.S., led by U.S. Vice-President JD Vance are heading to Islamabad, Pakistan, to begin discussion with their Iranian counterparts tomorrow to formulate a path to resolve the hostilities completely.
Minutes before taking off, Vance expressed an optimistic outlook though he also warned that Iran should not try to 'play' the U.S.
Despite Iran's protests, Israel refused to accept Lebanon was covered in the truce plan.
Though it expressed readiness to have direct talks with Lebanon, Israel conducted severe attacks on Lebanon, keeping the crisis alive.
On the economic front, in the U.S., the data released by the Bureau of Labor Statistics today revealed that the Consumer Price Index (CPI) increased 0.9% month-over-month in March, (the most since June 2022) following a 0.3% gain in February. The numbers are in line with forecasts.
On an year-on-year basis, the annual inflation rate jumped to 3.3% in March, (the highest since May 2024), demonstrating a sharp increase from 2.4% in February and January.
Core consumer prices (excluding food and energy) rose by 0.2% from the previous month in March, maintaining the growth rate from February and slightly below market expectations of a 0.3% increase.
The annual core inflation rate in the United States (excluding food and energy) rose to 2.6% in March from 2.5% in the previous two months, slightly below market expectations.
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