Gold Falls Amid Escalating US-Iran Tensions Over Strait of Hormuz
The recent developments in the US-Iran conflict have taken a toll on gold prices, which are experiencing fresh pressure. The escalating tensions between the two nations have led to increased bearish sentiment in gold futures. Iran has set out new demands for reopening the Strait of Hormuz, including compensating the country for war damage.
The surging bearish pressure in gold futures on Monday reflects the changing tone of President Trump, who told Axios that the US is only 'semi-negotiating' with Iran and signalled he would allow economic pressure to pile on Tehran. The Strait of Hormuz is a critical waterway through which about 20% of the world's oil and gas flows.
The US military has been conducting airstrikes against Iranian targets for almost six months, depleting its arsenal of premier offensive and defensive weapons stockpiles. Former Defence Secretary Leon Panetta characterised the shortage of munition stockpiles as 'poor planning' by the Pentagon.