Gold Slips Amid Hormuz Dispute and Rising Inflation Expectations

In recent weeks, gold has experienced another decline, reflecting the uncertainty surrounding the ongoing dispute over the Strait of Hormuz. This crucial passage for maritime oil transport is not only vital for global energy balance but also plays a significant role in the world economy as it carries approximately one-quarter of the world's annual marine crude oil production. The stability of this route is essential to maintain price stability and avoid unexpected supply chain disruptions, but the current dispute has kept geopolitical risks at high levels, pushing oil prices to elevated levels. This situation has further increased expectations for a tighter monetary policy from the Federal Reserve (Fed), which was already facing challenges with persistent inflation. Gold, traditionally seen as a safe-haven asset in times of uncertainty, did not escape this pressure as investors seek more secure and yielding assets in this volatile economic environment.