(RTTNews) – After two sessions of gains, gold prices have tumbled on Tuesday as both the U.S. and Iran refused to relax their demands for peace talks, thereby leaving the Strait of Hormuz closed, sending crude oil prices higher and renewing inflationary pressures and interest rate concerns.
Front Month Comex Gold for September month delivery has slumped by $53.60 (or 1.21%) to $4,370.80 per troy ounce.
Front Month Comex Silver for September month delivery has nosedived by $2.186 (or 3.30%) to $64.045 per troy ounce.
On June 17, the U.S. and Iran agreed to a Memorandum of Understanding to halt their attacks for a 60-day period and utilize this window to arrive at a framework agreement to find ways to resolve all their disputes through negotiations.
The MoU was short-lived after both nations claimed full authority over the control and management of the Strait of Hormuz in the Persian Gulf, resulting in renewed attacks.
Currently, the strait remains shut for shipping traffic, crippling oil and energy transit from the Arabian Gulf to the rest of the world.
The MoU expired yesterday, and U.S. President Donald Trump stated that the U.S. is not seeking an extension of the interim deal.
Trump reiterated that though Iran wants an agreement with the U.S., it is not amenable to make a deal that the U.S. would prefer to have.
Yesterday, in a telephone interview with Fox News, Trump mocked Iran, asking it to put up a white flag of surrender.
Trump asserted that direct backchannel talks with Iran’s Islamic Revolutionary Guards Corps were underway and threatened that the U.S. would bomb Oman if it gets in the way of U.S.-Iran talks.
Yesterday, Reuters reported citing a senior Iranian official that Iran is offering only a few weeks to the U.S. to implement the terms agreed in the ceasefire agreement. The official stated that Iran is ready to launch a timely and precise attack to break the U.S. naval blockade on Iranian ports.
Today, through Truth Social, Trump posted a map of the Hormuz region showing the crucial seaway as “NEW US territory”.
Suddenly changing his previous stance, Trump categorically stated that no negotiations are going on with Iran and none have been scheduled. Further, he added that the U.S. naval blockade of Iran is in full force and effect and the Strait of Hormuz is open and operative.
Quoting Kpler’s data, Reuters reported yesterday that only five commodity vessels passed through the strait on Saturday while none registered for Sunday. On Monday, only six vessels managed to transit the strait.
Today, the United Kingdom Maritime Trade Operations announced that a vessel was struck by an “unknown projectile” while exiting the Strait of Hormuz.
With the U.S. and Iran alternating their positions to achieve a resolution from military offensives to negotiations, uncertainty over the reopening of the Strait of Hormuz has intensified.
As a result, crude oil supply concerns continue to rise and the subsequent need by the global major banks to maintain a high-interest rate regime is pressuring gold prices on the downside.
However, the yellow metal received support from recent economic data releases which have trimmed the expectations for any near-term rate hike.
The U.S. dollar index was last seen trading at 99.64, up by 0.10 (or 0.10%) today.
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