Gold falls on Trump’s Hormuz plans

Today’s headlines

What’s happening: Gold prices fell this morning as investors assessed the latest developments in US-Iran talks.

What happened: US President Donald Trump announced a naval mission to escort ships stranded at the Strait of Hormuz, while Iran responded that this would be a violation of the ceasefire.

Strength in the US dollar also weighed on gold prices this morning.

Why it matters: Dubbing the naval mission as “Project Freedom,” the US President announced plans to help release stranded commercial vessels in the Strait of Hormuz. Trump said that the US has been asked by other countries to “help free up their ships” and that the mission would begin today.

Meanwhile, Iran said it is assessing the US response to its 14-point proposal, raising optimism over a resolution to the conflict.

The ongoing Middle East conflict has provided a sharp boost to energy prices on supply concerns. This has triggered inflation concerns and, in turn, sparked speculations of central banks keeping their benchmark interest rates higher for a longer period or even considering rate hikes.

Gold prices have lost around 12% since the beginning of the conflict, mainly on speculations of rate hikes and strength in the US dollar.

Gains in the US dollar exerted pressure on gold prices this morning, as a higher greenback makes metals more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 98.19.

Spot price for gold fell around 0.4% to $4,598.45 an ounce this morning.

In other metals trading, spot price for silver rose 0.4% to $75.6615 an ounce, platinum climbed 0.6% to $2,005.05 and palladium rose 0.3% to $1,533.68.

What to watch: Investors will keep an eye on Trump’s plan to free stranded ships in the Strait of Hormuz and ongoing talks between the US and Iran.

The markets today

The Australian dollar in focus today ahead of RBA’s interest rate decision

Context: The Australian dollar rose versus the US dollar this morning as investors digested the latest economic data.

Details: Data released this morning showed that private house approvals in Australia rose by 0.9% to 10,194 units in March following a 2% rise in February. This marked the fifth straight month of growth.

Australia’s building permits tumbled by 10.5% to 17,300 units in March compared to a 31.1% gain in the previous month. The figure came in worse than market expectations of a 9.9% decline.

Australia’s Melbourne Institute Monthly Inflation Gauge grew by 0.6% in April, slowing from a record 1.3% jump in March. Despite the slowdown, it was the second consecutive monthly rise.

ANZ–Indeed Australia’s job ads declined 0.8% in April following a 3.2% decline in March, which was the steepest downturn in six months.

Investors also assessed developments in the Middle East conflict, with US President Donald Trump announcing plans to free vessels stuck in the Strait of Hormuz.

Strength in the US dollar weighed on the Australian dollar this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose to 98.19.

The AUD/USD pair edged higher to 0.7207 this morning.

What to watch: The Reserve Bank of Australia is scheduled to announce its interest-rate decision (0830 UAE Time) on Tuesday. The Reserve Bank of Australia, which increased its cash rate by 25bps to 4.1% at its March meeting, is expected to raise rate further to 4.35% at the latest meeting.

Data on S&P Global composite PMI (0300 UAE Time), S&P Global services PMI (0300 UAE Time) and household spending (0530 UAE Time) will be released on Tuesday. Analysts expect Australia’s S&P Global composite PMI to surge to 50.1 in April from a final reading of 46.6 in March, while the services PMI business activity index is expected to rise to 50.3 in April from a final reading of 46.3 in the previous month. Household spending in Australia, which rose 0.3% in February, is expected to surge by 2% in March.

Other Markets: US trading indices closed mixed on Friday, with the S&P 500 and Nasdaq 100 up by 0.29% and 0.94%, respectively, and the Dow Jones index down by 0.31%.

The news shaping the markets

Ukraine’s President Volodymyr Zelenskyy met UK Prime Minister Keir Starmer to discuss the £78 billion loan scheme from the EU. The news sent the USD/RUB pair higher in forex trading this morning.

Indonesia’s S&P Global manufacturing PMI declined to 49.1 in April from 50.1 in March. The latest reading falling to its weakest level since June 2025 lent support to the USD/IDR forex pair.

Philippines’ S&P Global manufacturing PMI declined to 48.3 in April from 51.3 in the previous month. This being the first contraction in the manufacturing sector since November 2025 sent the USD/PHP pair higher in forex trading this morning.

Malaysia’s S&P Global manufacturing PMI climbed to 51.6 in April from 50.7 in the previous month. This being a surge to four-year highs exerted pressure on the USD/MYR forex pair.

South Korea’s S&P Global manufacturing PMI rose to 53.6 in April from 52.6 in the previous month. The region’s manufacturing activity growing at the strongest pace since February 2022 exerted pressure on the USD/KRW pair in forex trading this morning.

What else to watch today

Eurozone’s S&P Global manufacturing PMI (1200 UAE Time), South Africa’s ABSA manufacturing PMI (1300 UAE Time), Mexico’s business confidence (1600 UAE Time) and S&P Global manufacturing PMI (1900 UAE Time), Brazil’s S&P Global manufacturing PMI (1700 UAE Time) as well as US factory orders (1800 UAE Time), loan officer survey (2200 UAE Time) and Treasury refunding financing estimates (2300 UAE Time).