Gold Steady as Traders Track Hormuz Stalemate, Inflation Risks

Gold prices held steady on Monday as traders assessed the ongoing deadlock in the Strait of Hormuz, a critical chokepoint for global oil shipments, which has driven crude prices higher and reignited inflation concerns. The precious metal traded in a narrow range, reflecting a market caught between safe-haven bids from geopolitical tensions and headwinds from a potentially more hawkish Federal Reserve.

The Strait of Hormuz stalemate has disrupted tanker traffic, tightening physical crude supply and pushing Brent crude above $85 per barrel. For energy traders, the situation underscores the vulnerability of supply routes in the Middle East, with any escalation threatening to spike oil prices further. Higher oil prices feed into broader inflation expectations, which historically support gold as an inflation hedge. However, the same inflation pressure could prompt the Fed to keep interest rates higher for longer, a negative for non-yielding gold. NowPrice's real-time fuel quotes show diesel and gasoline prices edging up at the pump, reflecting the pass-through from crude.

Looking ahead, traders will monitor diplomatic efforts to resolve the Hormuz standoff, as well as upcoming US inflation data and Fed commentary. A sustained disruption could push gold toward resistance levels near $2,400, while a diplomatic breakthrough might trigger profit-taking. Key levels to watch include support at $2,320 and resistance at $2,380, with the broader trend hinging on whether inflation expectations continue to rise.