Gold slumps below $4,800 on renewed Strait of Hormuz tensions

• Gold price tumbles to near $4,775 in Monday’s early Asian session. 

• The Strait of Hormuz was closed again, with Iranian authorities warning vessels not to approach it.

• Traders brace for the US March Retail Sales data later on Tuesday.

Gold price (XAU/USD) slumps to around $4,775 during the early Asian session on Monday. Traders digest renewed tensions between the United States (US) and Iran over the critical Strait of Hormuz.

Bloomberg reported on Sunday that Iran denied it would participate in new peace talks with the US, hours after US President Donald Trump said its negotiators would head to Pakistan on Monday for a second round of peace talks with Iran.

The Iranian military declared the Strait of Hormuz closed to all commercial vessels, adding that it will target any ship approaching the strait until the US lifts its naval blockade of Iranian ports. 

Expectations for US interest rate cuts this year have shifted significantly toward a "higher-for-longer" stance due to persistent inflation and geopolitical instability in the Middle East. Gold is often used amid geopolitical uncertainty, but it does not yield interest, making it less attractive when interest rates are high.

Traders will take more cues from the US Retail Sales report later on Tuesday. Retail Sales is projected to show a rise of 1.3% MoM in March, compared to 0.6% in February. However, if the report shows softer-than-expected inflation in the US, this could weigh on the US Dollar (USD) and support the USD-denominated commodity price.