Gold prices held steady on Monday after bouncing back from nearly a 1% drop earlier in the day, as a weaker dollar helped offset declining hopes for quick U.S. interest-rate cuts linked to rising energy costs. Spot gold held firm at $5,017.53 per ounce, as of 0101. Gold futures in the U.S. for April delivery fell by 0.8%, closing at $5,020.90. The dollar experienced a slight decline, leading to a decrease in the cost of commodities priced in dollars, such as bullion, for holders of other currencies. The U.S. 10-year Treasury yields have decreased, making non-yielding bullion more appealing.

Oil prices have remained above $100 per barrel as the conflict involving the U.S. and Israel against Iran continues into its third week. This scenario presents considerable dangers to oil infrastructure and has led to the shutdown of the Strait of Hormuz, representing the most significant interruption to global supplies thus far. Higher crude prices drive inflation by raising transportation and production costs. Gold is seen as a protection against inflation; however, high interest rates increase the appeal of yield-generating assets, which reduces its charm.

U.S. President Donald Trump issued a warning of possible additional strikes on Iran’s main oil export facility, Kharg Island, over the weekend, emphasizing his refusal to engage in negotiations to resolve the ongoing conflict. Trump claimed that nations reliant on oil from the Gulf have an obligation to protect the strait. Meanwhile, the source reported that the Trump administration plans to announce as early as this week that several countries have agreed to form a coalition to escort ships through the Strait of Hormuz.

The U.S. Federal Reserve is expected to keep interest rates steady for the second meeting in a row when it issues its policy statement on Wednesday. Spot silver rose by 0.4%, hitting $80.88 per ounce. Platinum prices rose by 0.9% to reach $2,049.50, and palladium experienced a 0.3% increase, now at $1,556.50.