<ul>
<li>Iran seizes two ships in the Strait of Hormuz</li>
<li>Brent crude oil remains above $100 a barrel</li>
<li>U.S. Navy continues blockade of Iran’s ports</li>
</ul>
(Updates for Asia morning hours)
By Noel John
April 23 (Reuters) - Gold fell in choppy trade on Thursday as elevated oil prices fuelled fears of inflation and prolonged high interest rates, while investors looked for clarity on stalled peace talks between the U.S. and Iran.
Spot gold (XAU=) was down 0.7% at $4,705.09 per ounce, as of 0215 GMT. U.S. gold futures (GCcv1) for June delivery fell 0.6% to $4,722.10.
Brent crude oil prices remained above $100 a barrel after larger-than-expected gasoline and distillate stock draws in the United States, and over a lack of progress on the peace talks. (O/R)
“The sight of Brent oil back at triple digits is keeping inflation worries at the forefront, and is putting gold on the back foot today,” said Tim Waterer, chief market analyst at KCM Trade.
Higher crude oil prices can stoke inflation by raising transportation and production costs, increasing the likelihood of higher interest rates.
While gold is considered an inflation hedge, high interest rates make yield-bearing assets more attractive, weighing on bullion’s appeal.
Iran seized two ships in the Strait of Hormuz on Wednesday, tightening its grip on the strategic waterway after U.S. President Donald Trump called off attacks with no sign of the peace talks restarting.
Trump maintained the U.S. Navy blockade of Iran’s trade by sea, and Iran’s ​parliament speaker and ​top negotiator Mohammad Baqer Qalibaf said a full ceasefire only made sense if it was lifted.
“Investors are worried that this ‘ceasefire-plus-blockade’ status quo could drag on for months, turning a short-term spike into a long-term inflationary anchor, which would hurt gold from a yield perspective,” said Waterer.
Meanwhile, a Reuters poll of economists showed the U.S. Federal Reserve will likely wait at least six months before cutting interest rates this year as war-driven energy shocks reignite already-elevated inflation.
Traders now see a 23% chance of a 25-basis-point Fed rate cut in December, down from 28% a week ago. Before the war, there were expectations of two reductions for this year. (FEDWATCH)
Spot silver (XAG=) fell 1.4% to $76.64 per ounce, platinum (XPT=) lost 1.3% to $2,048.25, and palladium (XPD=) was down 1% at $1,529.25.

Trump pulled a last-minute reversal, announcing an extension of the ceasefire and maintaining the naval blockade pending a proposal from Iran. Iranian media reported that Iran formally refused to attend the US-Iran talks on the 22nd, and the White House stated that Vance and the US delegation canceled their trip to Pakistan, leaving the future arrangements of the negotiations uncertain. Do you think Iran will compromise first, or will Trump give in first? Feel free to share your thoughts in the comments!

Trump pulled a last-minute reversal, announcing an extension of the ceasefire and maintaining the naval blockade pending a proposal from Iran. Iranian media reported that Iran formally refused to attend the US-Iran talks on the 22nd, and the White House stated that Vance and the US delegation canceled their trip to Pakistan, leaving the future arrangements of the negotiations uncertain. Do you think Iran will compromise first, or will Trump give in first? Feel free to share your thoughts in the comments!

With US-Iran negotiations deadlocked, how long can the ceasefire last?

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PRECIOUS-Gold falls on oil-driven inflation fears; US-Iran developments in focus