By: Economy Middle east

Gold prices rose on Tuesday, as investors remained cautious ahead of a deadline established by U.S. President Donald Trump for reopening the Strait of Hormuz, a critical flashpoint in the Middle East conflict.

Spot gold surged 0.1 percent to $4,661.43 per ounce by 08:45 UAE time, while U.S. gold futures for June delivery increased 0.04 percent to $4,686.70.

In the UAE, gold rates underwent a downward adjustment. The price of 24K gold fell AED3.75 to AED561.00, and 22K gold dropped by AED3.50 to AED516.00. Additionally, 21K gold decreased AED3.25 to AED494.75, 18K gold fell AED2.75 to AED424.25, and 14K gold lost AED2.25 to AED330.75.

Iran stated on Monday it sought a permanent end to the conflict with the U.S. and Israel and resisted pressure to reopen the Strait of Hormuz, while Trump warned the country could face severe consequences if it did not comply with his Tuesday night deadline to conclude a deal.

Oil prices continued to rise, holding above $110 a barrel as Trump intensified his rhetoric against Iran.

Heightening global inflation concerns

The spike in oil prices has heightened inflation concerns. While gold typically benefits during periods of inflationary pressure, elevated interest rates diminish its appeal as a non-yielding asset.

Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee both view inflation as a significantly larger problem than employment, reinforcing their support for maintaining tighter monetary policy.

Markets widely anticipate no possibility of a Fed rate cut this year, according to CME’s FedWatch tool.

Investors now await the minutes of the Fed’s March policy meeting on Wednesday, along with U.S. inflation data, including Personal Consumption Expenditures (PCE) and the Consumer Price Index (CPI) later this week.

Spot silver fell 0.11 percent to $72.92 per ounce, platinum lost 0.65 percent to $1,972.55, and palladium decreased 0.15 percent to $1,488.25.