Spot gold was down 0.7% at $4,793.98 per ounce after hitting its lowest level since April ​13 earlier in the session

Gold prices dropped on Monday as the dollar firmed, ‌while news the Strait of Hormuz is closed again pushed oil prices higher and revived inflation fears.

Spot gold was down 0.7% at $4,793.98 per ounce, as of 0351 GMT, after hitting its lowest level since April ​13 earlier in the session.

Gold prices are lower today after the U.S.-Iran war ceasefire that markets ⁠celebrated last week appeared to be breaking down, said Ilya Spivak, head of global ​macro at Tastylive.

That has revived the now-familiar ‘war trade’ dynamics we’ve seen since the beginning of the ​conflict. Crude oil prices gained, which echoed into inflation expectation and drove up both yields and the U.S. dollar, Spivak said.

The dollar index strengthened, making U.S. dollar-priced bullion more expensive for other currency holders.

Oil prices climbed and stock markets wobbled as rising tension in the ​Middle East kept shipping in and out of the Gulf to a bare minimum.

The U.S. has reportedly seized an ‌Iranian ⁠cargo ship that tried to run its blockade and Iran warned of retaliation, raising the possibility that the ceasefire between the two countries might not last for even the two days it is set to remain in force.

Iran said it would not participate in a ​second round of ​negotiations that the U.S. ⁠had hoped to kick off before the ceasefire expires on Tuesday.

Gold prices have dropped nearly 8% since the U.S. and Israel launched ​strikes on Iran in late February, on concerns that higher energy prices ​could stoke ⁠inflation and keep global interest rates higher for longer.

While gold is considered an inflation hedge, higher interest rates crimp demand for the non-yielding asset.