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Gold prices declined during Asian trading on Monday after strong gains in the previous week, as higher oil prices and a firmer U.S. dollar weighed on investor appetite for bullion following President Donald Trump’s criticism of Iran’s response to a U.S.-supported peace proposal.
Spot gold dropped 1% to $4,669.82 per ounce by 02:35 ET (06:35 GMT), while U.S. gold futures slipped 1.1% to $4,678.31.
The precious metal had risen more than 2% last week amid optimism that the United States and Iran could move closer toward a peace agreement.
Trump Calls Iran Reply “Totally Unacceptable” as Oil Prices Surge
President Trump described Tehran’s latest reaction to Washington’s peace initiative as “totally unacceptable,” cooling expectations for a near-term breakthrough in U.S.-Iran negotiations.
According to The Wall Street Journal, Iran rejected U.S. demands to dismantle its nuclear facilities and refused to suspend uranium enrichment for two decades.
In its counterproposal, which reportedly spanned multiple pages, Tehran suggested ending the conflict alongside a gradual reopening of the Strait of Hormuz to commercial shipping traffic. Iran also called on the United States to remove its blockade on Iranian vessels.
The report added that Iran agreed part of its stockpile of highly enriched uranium could be diluted, while the remaining material would be transferred to a third-party country.
Oil prices jumped nearly 5% in early trading as the closure of the Strait of Hormuz continued to disrupt markets.
The increase in crude prices strengthened concerns that inflationary pressures could remain elevated globally, potentially forcing central banks — including the U.S. Federal Reserve — to keep interest rates higher for longer. That environment reduced the attractiveness of non-interest-bearing assets such as gold.
Investors Watch Trump-Xi Talks This Week
The U.S. dollar also gained ground during Asian trading after stronger-than-expected U.S. employment data released last week reinforced expectations that the Federal Reserve may postpone interest rate cuts. A stronger dollar generally makes gold more expensive for buyers using foreign currencies.
The U.S. Dollar Index was up 0.2% during Asian market hours.
Investor attention is now shifting toward upcoming U.S. inflation data as well as Trump’s scheduled visit to China later this week, where discussions with Chinese President Xi Jinping are expected to include Iran, trade tensions, and global energy security.
Among other precious metals, silver rose 0.2% to $80.51 per ounce, while platinum fell 1.4% to $2,030.04 per ounce.
Benchmark copper futures on the London Metal Exchange increased 0.3% to $13,608.33 per ton, while U.S. copper futures advanced 0.4% to $6.32 per pound.