Gold prices posted modest gains on Tuesday while the U.S. dollar slipped, as investors remained cautious ahead of the deadline set by President Donald Trump for Iran to reopen the Strait of Hormuz.
At 05:04 ET (09:04 GMT), spot gold was up 0.8% at $4,685.54 per ounce, while gold futures for June delivery climbed 0.6% to $4,710.84 per ounce.
Trump warned that the United States would target “every bridge” and “power plant” in Iran if Tehran fails to meet his Tuesday deadline of 8 p.m. ET to agree to a deal reopening the Strait of Hormuz. The strategic waterway—through which roughly one-fifth of global oil supply flows—has effectively been closed to tanker traffic, pushing oil prices higher and raising concerns about inflation and the global economic outlook.
Iran has called for a comprehensive agreement that includes sanctions relief, security guarantees and compensation for damages. However, media reports suggest Washington is unlikely to accept those terms.
If new U.S. strikes take place, Trump said Iran would need “100 years to rebuild.”
Despite the tough rhetoric, Trump also indicated that diplomacy could still end the conflict, which began in late February after joint U.S. and Israeli attacks on Iran.
Gold also drew support from ongoing purchases by China’s central bank, which extended its gold-buying streak to a seventeenth consecutive month. The People’s Bank of China reported holdings of 74.38 million fine troy ounces at the end of March, compared with 74.22 million in February.
Gold still under pressure over the past month
Even with Tuesday’s gains, gold prices have declined over the past month as rising energy costs have strengthened expectations that central banks could keep interest rates elevated for longer. Because gold does not generate yield, it often struggles in environments where borrowing costs remain high.
Another factor weighing on the metal has been the stronger U.S. dollar. The greenback has benefited from safe-haven demand as investors seek stability amid geopolitical tensions, making dollar-denominated gold more expensive for buyers using other currencies.
On Tuesday, the dollar index, which measures the U.S. currency against a basket of major rivals, fell by 0.2%.
However, the dollar remains roughly 0.8% higher over the past month. During the same period, spot gold has declined by more than 8%.
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