The yellow metal jumped more than 2% last week amid U.S.-Iran peace deal hopes

Gold prices dropped in Asian trading on Monday after posting weekly gains, as surging oil prices and a stronger U.S. dollar dented bullion’s appeal following U.S. President Donald Trump’s rejection of Iran’s response to peace proposal.

Spot gold slid 0.8% to $4,677.82 an ounce by 01:03 GMT.

The yellow metal jumped more than 2% last week amid U.S.-Iran peace deal hopes.

The U.S. president described Tehran’s latest response to Washington’s peace framework as “totally unacceptable”, dampening hopes for a near-term breakthrough in U.S.-Iran negotiations.

Brent crude rose more than 3% above $104 a barrel.

Higher oil prices reinforced concerns that inflation could remain elevated globally, potentially forcing central banks to keep interest rates higher for longer. That reduced demand for non-yielding assets such as gold.

The dollar also strengthened in Asian trade after stronger-than-expected U.S. payrolls data last week supported expectations the central bank would delay rate cuts. A firmer dollar makes gold more expensive for holders of other currencies.

The US Dollar Index traded 0.1% higher in Asian hours.

Markets had previously advanced on optimism that Tehran and Washington could reach an agreement to ease tensions in the Gulf and reopen shipping routes around the Strait of Hormuz, through which around a fifth of global oil consumption passes. However, the latest impasse revived fears that negotiations could fall through.

Iran’s counterproposal reportedly called for sanctions relief, security guarantees, and recognition of Tehran’s right to retain parts of its nuclear program, while the U.S. proposal demanded restrictions on uranium enrichment and tighter international oversight.

Investor focus is now turning to Trump’s visit to China later this week, where discussions with Chinese President Xi Jinping are expected to include Iran, trade, and global energy security.

Among other precious metals, silver prices dropped 0.7% to $79.76 per ounce, while platinum shed 1.3% to $2,031.60/oz.