Gold prices turned slightly lower on Monday, after Iran rejected a proposed ceasefire with the U.S. and President Donald Trump ramped up his threats against the country.
Spot gold XAU/USD slipped 0.6% to settle at $4,650.56/oz, while Gold Futures inched 0.1% lower to settle at $4,676.20/oz. Bullion rose 4% last week.
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Trump says Iran made ’significant’ proposal, but ’not good enough’ Both the U.S. and Iran have received a framework of a plan to halt hostilities, although Tehran has rebuffed any immediate reopening of the Strait of Hormuz, Reuters reported, citing a source aware of the proposals.
The plan -- brokered by Pakistan following overnight contacts with U.S. and Iranian officials -- would start an immediate ceasefire followed by talks on a broader settlement to be concluded within 15 to 20 days, Reuters reported.
Iran’s state media said the country had conveyed its response to the proposal, rejecting a ceasefire and instead emphasizing the necessity of a "permanent end" to the war.
Iran’s response consists of 10 clauses, state media said, including protocol for safe passage through the critical Strait of Hormuz and the lifting of sanctions.
Axios first reported on Sunday that the U.S., Iran and regional mediators were discussing a potential 45-day ceasefire as part of a two-phase deal that could lead to a permanent end to the war, citing U.S., Israeli and regional sources.
Trump later told reporters at a White House Easter event that Iran had made a proposal and a "significant" one at that, but it was "not good enough."
Trump reiterates Tuesday deadline for Iran A chunk of the spotlight was also on Trump’s ultimatum to Iran that it must restore shipping through the critical Strait of Hormuz by 20:00 ET on Tuesday or face severe consequences.
Trump issued the warning over the weekend in a Truth Social post, saying “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran,” signaling that Iranian civilian infrastructure could become a target if tanker traffic through the strategic waterway is not restored.
"We are dealing with them. Essentially, they have until 8 o’clock tomorrow night, Eastern Time. But we are dealing with them ... I think it’s going fine, but we’ll have to see," the president told reporters at a White House press conference, reiterating the deadline.
At the same conference, Trump said that the reopening of the strait was a big priority for the U.S. The vital waterway transports roughly one fifth of the world’s oil and gas supply, and its effective closure by Tehran since the start of the conflict has led to skyrocketing crude prices.
The surge in oil prices has led to inflationary concerns across the globe, in turn sparking expectations of higher interest rates for longer. Gold tends to underperform in such higher rate environments.
