(RTTNews) – Gold prices fell sharply to $4,600 an ounce on Tuesday, hitting a three-week low, as higher oil prices raised concerns about the outlook for inflation and interest rates.
Spot gold fell 1.5 percent to $4,612.48 an ounce, while US gold futures were down 1.5 percent at $4,625.86.
The dollar index gained momentum from a one-week low, while Brent crude prices rose above $111 a barrel after media reports suggested US President Donald Trump is not satisfied with an Iranian offer to reopen the Strait of Hormuz in exchange for a delay in nuclear talks and an end to the two-month war.
Citing unnamed US officials, ABC News reported that the deal fell short of Washington’s red lines.
According to Iran’s Defense Ministry spokesman Reza Talai-Nik, the United States is no longer able to “direct” its policy on independent nations and Washington “must accept that it must abandon its illegal and irrational demands”.
Meanwhile, stepping up its “maximum pressure” campaign, the Trump administration has warned foreign companies and governments that they will face tougher sanctions if they continue to do business with Iranian airlines.
This warning extends to include any third party facilitation of services beyond direct trading. “Doing business with sanctioned Iranian airlines risks evading US sanctions,” US Treasury Secretary Scott Besant warned in a post on Twitter.
Traders are also awaiting cues from a series of rate decisions by major central banks, including the Federal Reserve, on Wednesday.
The Federal Open Market Committee (FOMC) will announce its policy decision on Wednesday, with the central bank widely expected to keep the benchmark interest rate unchanged.
This will be Jerome Powell’s last meeting as Chairman of the Federal Reserve before his official term ends on May 15.
Earlier today, the Bank of Japan kept its policy rates steady and upgraded its inflation forecasts in a 6-3 vote split.
The Bank of Canada, Bank of England and European Central Bank are scheduled to meet this week.
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