Gold Tumbles as US Blockade of Hormuz Raises Inflationary Risks

Gold tumbled on mounting inflation concerns, after US-Iran peace talks ended without resolution and American plans to blockade the Strait of Hormuz deepened a global energy-supply shock.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Gold tumbled on mounting inflation concerns, after US-Iran peace talks ended without resolution and American plans to blockade the Strait of Hormuz deepened a global energy-supply shock.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Bullion fell as much as 2.2% to below $4,650 an ounce, wiping out the previous week’s gain. The US military said it will begin the blockade at 10 a.m. Eastern Time on Monday after weekend negotiations with Iran failed to secure a deal to turn a fragile ceasefire into a lasting peace after six weeks of war in the Middle East.Oil and natural gas prices surged, with President Donald Trump also saying the US will interdict any vessel that has paid a toll to Iran for safe passage through Hormuz, the maritime chokepoint that links the Persian Gulf to global markets. Before the war, a fifth of the world’s crude and liquefied natural gas passed through the strait.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Equity futures slid and a gauge of the dollar rose as much as 0.4%, a headwind for gold that’s priced in the US currency. The spike in energy prices also raised inflationary risks, making it more likely that central banks will delay cutting interest rates or even hike them. This is a negative for non-yielding gold, which benefits when borrowing costs are lower.In an early reading of the war’s impact on the US economy, March inflation climbed by the most in nearly four years, with a record increase in gasoline prices responsible for nearly three-quarters of the monthly advance, according to data from the Bureau of Labor Statistics released Friday.Spot gold fell 2% to $4,656.55 an ounce at 6:56 a.m. Singapore time. Silver slid 3.1% to $73.52 an ounce. Platinum and palladium also declined.

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