WASHINGTON (dpa-AFX) - Extending the losses from Friday's session, gold prices have edged lower on Monday as traders assess the plunge in crude oil prices due to the cancellation of planned U.S. strikes on Iran against Iran's refusal to acknowledge any ongoing peace talks with the U.S. and unwillingness to concede authority over the Strait of Hormuz.
Front Month Comex Gold for September month delivery has inched lower by $16.00 (or 0.39%) to $4,046.40 per troy ounce.
Front Month Comex Silver for September month delivery has ticked higher by $0.039 (or 0.07%) to $57.825 per troy ounce.
The U.S.-Iran conflict that began on February 28 after U.S.-Israeli forces commenced their attack on Iran is now in its sixth month with no agreement reached as of now.
Rendering the U.S.-Iran Memorandum of Understanding signed on June 17 ineffective, U.S. forces continued to attack Iran heavily while Iran relentlessly targeted U.S. bases in the gulf region.
Despite intermittent brief pauses in the attacks, the mutual exchange of attacks kept gulf tensions higher. As a result, the Strait of Hormuz which was closed by Iran remains shut. With shipping traffic across the region severely crippled, crude oil prices rose day by day.
The escalation was set to reach a new high after Trump warned on Friday that the U.S. would be hitting Iran very hard. In response, Iran vowed to punish the U.S.
Citing possible flight disruptions and imminent security risks, on Saturday, the U.S. administration urged Americans across the Middle East to either depart immediately or get ready to leave the region at short notice.
However, in a sudden reversal of events, late Saturday, Trump stated that he had called off the strikes.
Trump claimed that Iran and other Middle Eastern countries asked the U.S. to hold off on any attacks and informed him that the 'perimeters' of a deal have been agreed to including the immediate reopening of the Strait of Hormuz. Further, he stated that fresh talks were set to begin on Monday.
Even then, Trump hinted at a possible future retaliation by stating that the pause depends on how rapidly Iran makes a deal.
On Sunday, while speaking to reporters on Air Force One, Trump remarked that the massive attacks he had cancelled were supposed to be the biggest since World War II. Trump stressed that it could take place again anytime he wanted to.
Not imposing any deadline to Iran to finalize a deal, Trump remarked that he is not looking to kill people.
Analysts received Trump's latest message with cautious optimism as the gulf scenario has been alternating between war and peace every now and then.
With diminishing near-term war threat, crude oil prices nosedived.
However, citing Iran's Foreign Ministry, Iran's Mehr news agency reported that Iran was in no talks with the U.S.
Irked by Iran's obstinacy, through Truth Social, Trump accused Iran of being duplicitous and reiterated that the U.S. is in complete control of the Hormuz strait.
Gold prices swung between support from easing inflationary pressure and lowering interest rate concerns on the one hand against Iran's hard stance which could revive the conflict on the other.
The U.S. dollar index was last seen trading at $99.99, up by $0.08 (or 0.08%) today.
Currently, investors are betting on a 66.50% chance of a quarter-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on September 15-16 while the odds on rates being held at the current level stand at 33.50%, according to the CME Group's FedWatch Tool.
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