WASHINGTON (dpa-AFX) - Gold prices have edged lower on Thursday as the planned second round of U.S.-Iran negotiations has been delayed indefinitely with both sides hardening their stance, leaving the Strait of Hormuz blocked with no resumption of oil transit, thereby stoking inflationary concerns once again.
Front Month Comex Gold for June month delivery has fallen by $28.60 (or 0.60%) to $4,724.40 per troy ounce.
Front Month Comex Silver for June month delivery has slumped by $2.094 (or 2.68%) to $76.155 per troy ounce.
In the war between the U.S. and Israel versus Iran, oil and energy transit has been crippled after Iran immediately blocked the Strait of Hormuz through which one-fifth of the world's oil and energy trade happened. Since then, oil prices have seen an enormous increase of more than 60%.
The situation appeared to cool off after U.S. President Donald Trump announced a two-week ceasefire on April 8 during which the U.S. and Iran held negotiations in Pakistan to arrive at a framework to plan future measures to solve the hostilities once for all.
After the talks failed, under Trump's orders, U.S. naval forces stationed near Iran enforced a blockade on all ships trying to enter or exit Iranian ports.
Trump agreed to a second round of discussions to iron out the differences but Iran refused to participate as U.S. forces seized an Iranian-flagged vessel across the Strait of Hormuz.
Trump warned that the U.S. would restart bombing Iranian energy and power installations if it hesitates to secure a deal with the U.S.
Iran refused to budge to U.S. pressure and responded stating it has 'new cards' on the battlefield.
Concerns of a prolonged war in the gulf increased with panic gripping the markets.
Hours before the ceasefire was set to end on April 22, Trump announced an extension of the truce and agreed to give more time to Iranian leaders to come up with a unified proposal.
With no deadline announced by Trump, this open-ended call for diplomacy to replace military aggressions calmed the markets.
However, Iran vowed it would not reopen the narrow Hormuz waterway as long as the U.S. blocked its ports. Iran then seized two ships to assert its control.
Trump directed U.S naval forces to 'shoot and kill' any boat that could possibly be laying sea mines in the waters of the Strait of Hormuz.
At the center of the standoff is control over Strait of Hormuz over which both U.S. and Iran are laying claims as well as the persistent demand by Trump on Iran to halt all its nuclear programs, which Iranian hardliners are refusing to accept.
The dual blockade by the U.S. and Iran continues to drive oil and energy prices higher and consequently inflationary pressures are on the rise. As a result, gold prices gave ground today.
With intensifying rhetoric from both sides, experts feel that developments in the coming days could decide the trajectory of global economy and the Middle East.
The U.S. Department of Labor's record shows that the number of people claiming unemployment benefits rose by 6,000 to 214,000 for the week ending April 18.
Continuing jobless claims increased to 1,821,000 for the week ending April 11 from 1,809,000 of the previous week.
The four-week average of jobless claims increased to 210,750,000 in April from 210,000 of the previous week.
The U.S. dollar index was last seen trading at 98.86, up by 25 points (or 0.25%) today.
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