Gold prices moved lower during Asian trading on Monday after recording solid gains last week, as rising oil prices and a stronger U.S. dollar weakened demand for bullion following President Donald Trump’s rejection of Iran’s response to a U.S.-backed peace proposal.
Spot gold declined 1% to $4,669.82 an ounce by 02:35 ET (06:35 GMT), while U.S. gold futures fell 1.1% to $4,678.31.
The precious metal had advanced more than 2% over the previous week amid optimism surrounding a potential peace agreement between the United States and Iran.
Trump Rejects Iran Proposal as Oil Prices Jump and Hormuz Remains Closed
President Trump described Tehran’s latest reply to Washington’s peace framework as “totally unacceptable,” reducing hopes of a near-term breakthrough in negotiations between the U.S. and Iran.
According to a report from The Wall Street Journal, Tehran rejected U.S. demands to dismantle its nuclear infrastructure and refused to halt uranium enrichment for a period of 20 years.
In its multi-page counterproposal, Iran reportedly suggested ending the conflict alongside a gradual reopening of the Strait of Hormuz to commercial shipping, while also calling for the United States to lift its blockade on Iranian vessels.
The report added that Tehran agreed that part of its highly enriched uranium stockpile could be diluted, while the remainder would be transferred to a third country.
Oil prices surged nearly 5% during early trading as the Strait of Hormuz remained closed.
The sharp rise in crude prices intensified concerns that inflation could stay elevated worldwide, potentially forcing central banks — including the U.S. Federal Reserve — to maintain higher interest rates for a longer period. That environment reduced the appeal of non-yielding assets such as gold.
Trump-Xi Meeting in Focus This Week
The U.S. dollar also strengthened during Asian trading after stronger-than-expected U.S. payroll figures released last week reinforced expectations that the Federal Reserve may delay interest rate cuts. A firmer dollar tends to make gold more expensive for investors using other currencies.
The U.S. Dollar Index rose 0.2% during Asian market hours.
Investor attention is now turning toward upcoming U.S. inflation figures as well as Trump’s scheduled visit to China later this week, where discussions with Chinese President Xi Jinping are expected to cover Iran, trade relations, and global energy security.
Among other precious metals, silver gained 0.2% to $80.51 per ounce, while platinum dropped 1.4% to $2,030.04 an ounce.
Benchmark copper futures on the London Metal Exchange rose 0.3% to $13,608.33 per ton, while U.S. copper futures climbed 0.4% to $6.32 per pound.