(RTTNews) - Gold prices fell sharply toward $4,600 an ounce on Tuesday, hitting a three-week low as elevated oil prices fueled concerns about inflation and the outlook for interest rates.
Spot gold tumbled 1.5 percent to $4,612.48 an ounce while U.S. gold futures were down 1.5 percent at $4,625.86.
The dollar index regained momentum from a one-week low while Brent crude prices consolidated above $111 a barrel after media reports suggested that U.S. President Donald Trump is not satisfied with the Iranian proposal to reopen the Strait of Hormuz and end the two-month war in exchange for delaying nuclear talks.
Citing anonymous U.S. officials, ABC News reported that the deal fell short of Washington's red lines.
The United States is no longer able to "dictate" its policy to independent nations and Washinton should "accept that it must abandon its illegal and irrational demands," according to Iran's defense ministry spokesman Reza Talaei-Nik.
Meanwhile, in an escalation of its "maximum pressure" campaign, the Trump administration has warned foreign companies and governments of tough sanctions if they continue doing business with Iranian airlines.
The warning extends beyond direct trade to include any third-party facilitation of services. "Doing business with sanctioned Iranian airlines risks exposure to U.S. sanctions, U.S. Treasury Secretary Scott Bessent warned in a post on X.
Traders also await cues from a string of rate decisions by major central banks, including from the Federal Reserve on Wednesday.
The Federal Open Market Committee (FOMC) will announce its policy decision on Wednesday, with the central bank widely expected to keep the benchmark interest rate unchanged.
This meeting will be Jerome Powell's last as chair of the Federal Reserve before his official term ends on May 15.
Earlier today, the Bank of Japan kept its policy rate steady in a split 6-3 vote and upgraded its inflation forecasts.
The Bank of Canada, the Bank of England and the European Central Bank are all due to meet this week.
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