MUSCAT : Spot gold fell 0.8% to $4,698.22 per ounce by 0913 GMT after earlier touching its highest level since April 21. U.S. gold futures for June delivery also declined 0.5% to $4,706.10.

The drop came as renewed concerns over energy prices and U.S. monetary policy outlook weighed on the precious metal market. Oil prices climbed amid disruptions around the Strait of Hormuz, pushing U.S. Treasury yields higher and strengthening the dollar.

U.S. President Donald Trump said a ceasefire deal with Iran was “on life support” after Tehran rejected a U.S. proposal to end the conflict.

Analysts said the rise in energy prices is adding pressure on inflation expectations ahead of the release of the latest U.S. Consumer Price Index (CPI) data later in the day.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said higher oil prices were once again driving U.S. bond yields upward while also boosting the dollar, both of which negatively impacted gold.

Benchmark 10-year U.S. Treasury yields touched a one-week high, while the dollar gained 0.4%, making gold more expensive for buyers using other currencies.

Markets are now increasingly doubtful about any U.S. Federal Reserve rate cuts this year. According to CME Group’s FedWatch tool, traders are even pricing in a 36% chance of a rate hike by March 2027.

Investors are also closely watching Trump’s upcoming two-day visit to China, where he is expected to meet Chinese President Xi Jinping, with Middle East tensions likely to dominate discussions.

Despite the decline, analysts believe gold remains rangebound, with support seen near $4,500 and resistance around the $4,757 mark.

Other precious metals also weakened during the session. Spot silver fell 2.4% to $84.05 per ounce, platinum dropped 3.1% to $2,066.15, while palladium declined 1.6% to $1,484.23.

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