By: Economy Middle east

Gold edged higher on Monday, supported by a softer dollar after reports that Iran had floated a new proposal to help end the conflict with the U.S. and reopen the Strait of Hormuz.

Spot gold rose 0.26 percent to $4,712.4 per ounce as of 9:59 UAE time, after falling 2.5 percent last week to end a four-week winning streak. U.S. gold futures for June delivery slipped 0.32 percent to $4,725.64.

UAE gold prices edged higher today, with local rates showing gains across the board. 24-carat gold climbed AED2.00 to AED569.50 per gram, 22-carat rose AED1.75 to AED527.25, 21-carat increased AED1.50 to AED505.50, 18-carat gained AED1.25 to AED433.25, and 14-carat advanced AED1.00 to AED338.00.

The dollar eased after reports said Iran, through Pakistani mediators, had presented a new proposal to the U.S. on reopening the Strait of Hormuz and ending the conflict. President Donald Trump said on Sunday that Iran could call if it wants to negotiate an end to the conflict, while stressing it can never have a nuclear weapon.

Trump also canceled a trip by two U.S. envoys to Pakistan, which serves as a mediator in the conflict, dealing another setback to peace prospects.

Oil prices also climbed as stalled peace talks prolonged the disruption to Middle East energy exports. Higher crude prices can fuel inflation by increasing transportation and production costs, which can raise the odds of higher interest rates.

Gold remains supported as an inflation hedge, but higher rates can reduce its appeal by making yield-bearing assets more attractive. Investors are now waiting for the U.S. Federal Reserve’s interest rate decision on Wednesday.

Among other precious metals, silver rose 0.18 percent to $75.75 per ounce, platinum fell 0.31 percent to $2,024.05, and palladium declined 0.27 percent to $1,480.00.