Gold prices moved slightly higher on Tuesday while the U.S. dollar weakened, as investors closely monitored the approaching deadline set by U.S. President Donald Trump for Iran to reopen the Strait of Hormuz.
By 05:04 ET (09:04 GMT), spot gold had risen 0.8% to $4,685.54 per ounce, while June gold futures were up 0.6% at $4,710.84 per ounce.
Trump warned that the United States would destroy “every bridge” and “power plant” in Iran if the country fails to meet his Tuesday deadline of 8 p.m. ET to agree to a deal that would reopen the Strait of Hormuz. The waterway—through which roughly one-fifth of the world’s oil supply passes—has effectively been closed to tanker traffic, pushing oil prices higher and raising concerns about inflation and global economic growth.
Iran has called for a comprehensive settlement that would include sanctions relief, security guarantees and compensation for damages, though media reports indicated that Washington is unlikely to accept those conditions.
If the United States launches new strikes, Trump said Iran would need “100 years to rebuild.”
Despite the strong rhetoric, Trump also suggested that diplomacy could still end the conflict, which began in late February following joint U.S. and Israeli strikes on Iran.
Gold prices were also supported by continued purchases from China’s central bank, which extended its buying streak of the metal to a seventeenth consecutive month. The People’s Bank of China reported reserves of 74.38 million fine troy ounces at the end of March, up from 74.22 million in February.
Gold still down over the past month
Despite Tuesday’s gains, gold has declined over the past month as rising energy prices have fueled expectations that central banks may keep interest rates elevated for longer. Because gold does not pay interest, it typically underperforms when borrowing costs remain high.
Additional pressure on the metal has come from the stronger U.S. dollar. The greenback has benefited from safe-haven demand as investors seek stability amid geopolitical tensions, making gold—priced in dollars—more expensive for buyers using other currencies.
On Tuesday, the dollar index, which measures the U.S. currency against a basket of major peers, slipped 0.2%.
However, the dollar remains about 0.8% higher over the past month. During the same period, spot gold has fallen by more than 8%.