WASHINGTON (dpa-AFX) - Extending losses from the two previous sessions, gold prices have declined sharply on Wednesday as Iran struggles to reach a deal with the U.S. while the Strait of Hormuz remains blocked for oil transit.
Front Month Comex Gold for June month delivery has slid by $44.80 (or 0.97%) to $4,563.60 per troy ounce.
Front Month Comex Silver for June month delivery has plunged by $1.651 (or 2.25%) to $71.833 per troy ounce.
With the U.S.-Israel versus Iran war entering day number 61 today, through his social media platform Truth Social, Trump urged Iran to get its act together soon and quickly sign a deal with the U.S.
Due to the ongoing supply disruption concerns, WTI crude oil prices for June month delivery was last seen trading at $107.19, up by $7.26 (or 7.27%).
The Wall Street Journal reported that Trump has instructed his aides to get ready for a prolonged blockade on Iran, seemingly to cripple its economy and thereby compel the nation to sign a deal suitable to the U.S.
Axios reported that Trump held discussions with top executives from leading global oil majors asking them to be prepared for an extended blockade and to find ways to minimize its impact on American consumers.
Iran's oil industry has already begun shutting production.
U.S. Treasury Secretary Scott Bessent announced via X that Iran will soon face a gasoline shortage.
On the diplomatic front, Trump declined to go ahead with the peace proposal submitted on Monday by Iran.
Iran wanted the U.S. to lift the naval blockade currently in place on all ships entering or exiting Iranian ports in exchange for reopening the Strait of Hormuz. However, Iran wanted to maintain its control over the Strait of Hormuz and insisted that the discussions related to its nuclear programs be held at a later stage. Apparently, Trump was displeased with this idea.
According to CNN, with a focus on restarting negotiations, Iran is working diligently to revise the plan and has reportedly offered to halt its military operations in the Hormuz strait.
Yesterday, at the end of a summit of the leaders of Gulf Cooperation Council in Jeddah, Saudi Arabia, which was held to discuss the ongoing Middle East crisis, the Secretary General of the GCC Jasem Mohamed Albudaiwi issued a strong condemnation of Iran for its attack on its own neighbors over the past weeks. The council asked Iran to make serious efforts to regain trust.
The group rejected Iran's illegal measures to shut down the Strait of Hormuz and were against any imposition of fees on ships passing through the strait.
In a significant move, the member-nations have agreed to expedite measures to build a joint oil and gas pipeline to reduce dependency on the strait for oil and energy exports in the future.
Despite a U.S.-brokered ceasefire in place between Israel and Lebanon, Israel continued to conduct strikes targeting Hezbollah militants in southern Lebanon.
On the monetary front, the two-day meeting of the U.S. Federal Reserve that began yesterday concludes today.
While expectations of another rate cut are off the table, investors are waiting to parse the policy statements to derive cues on future cuts. Of note, the term of the current Fed Chair Jerome Powell ends in mid-May.
Since the start of the U.S.-Iran war, the Strait of Hormuz remains closed, blocking oil and energy shipments, and as a result, oil have prices surged, leading to inflationary concerns.
Global major central banks were compelled to hold back on any interest rate lowering and high interests weighed on gold prices.
The U.S. dollar index was last seen trading at 98.89, up by 0.30 points (or 0.30%) today.
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