Gold slumps below $4,700 on Trump rejection of Iran peace proposal
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Gold price slumps to near $4,690 in Monday’s early Asian session.
Trump rejected Iran’s latest proposal to end the conflict as “totally unacceptable.”
US Nonfarm Payrolls rise by 115K in April, stronger than expected.
Gold price (XAU/USD) falls to around $4,690 during the early Asian session on Monday. The precious metal attracts some sellers after US President Donald Trump rejected Iran’s latest peace offer to end the 10-week conflict choking the Strait of Hormuz, fanning inflation fears.
Trump and Iran rejected each other’s peace proposals to end the war as the two sides struggle to maintain a fragile ceasefire, per Bloomberg. US President labeled Iran’s response to his proposal to end the conflict as “totally unacceptable.” Meanwhile, Iranian officials insisted the US needs to pay compensation for war damages, adding that Tehran will reject the US plan that would have forced the country to submit to Trump’s excessive demands.
The ongoing conflict between the US and Iran may keep inflation risk elevated, as well as the expectation for higher interest rates, which weigh on non-yielding bullion. It’s worth noting that Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
US Nonfarm Payrolls (NFP) beat expectations, though the plodding US labor market sent up several flags for a potential slowdown this year. The US economy added 115K jobs in April, versus the 185K increase (revised from 178K) in March, according to the Bureau of Labor Statistics on Friday. This figure surpassed the estimations of 62K by a wide margin. Meanwhile, the Unemployment Rate held at 4.3% in April, in line with the market consensus.
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