Oil Prices Soar as Trump Rejects Iran Peace Proposal
Oil prices surged on Monday, with Brent crude reaching $101 per barrel and US crude oil futures rising by about 2%. The increase in oil prices was triggered by US President Donald Trump's rejection of an Iran peace proposal to resolve the Middle East conflict and reopen the Strait of Hormuz.
The rise in oil prices has stoked inflation fears, leading to a decline in bullion prices. Spot gold fell 3.1% to $4,155.67 per ounce, while spot silver dropped 4.6% to $61.32 per ounce. Platinum and palladium also declined, losing 2.4% and 3.4%, respectively.
Analysts attribute the weakness in gold prices to higher oil prices and increased probability of further US rate hikes. This could keep US real yields and the US dollar elevated, raising the opportunity cost of holding non-yielding gold.