Gold Slumps Amid Inflation Concerns, Strengthening U.S. Dollar

(RTTNews) - Gold prices have pulled back sharply on Monday as investors rush to the U.S. dollar after skyrocketing oil prices due to the war in the Middle East aggravated concerns of inflation along with forecasts that global major banks would adopt a hawkish stance in the near-term.

Front Month Comex Gold for April delivery has tumbled $54.6 (or 1.06%) to $5,104.10 per troy ounce.

Front Month Comex Silver for April delivery has dipped by $0.216 (or 0.26%) to $84.230 per troy ounce.

The raging Middle East conflict that began after U.S. and Israeli forces launched an attack on Iran (termed Operation Epic Fury) on February 28 entered day number 10. Nearly 1,255 Iranians have been killed so far.

While Iran has engaged in counter-attacks, today its authorities announced Mojtaba Khamenei as the successor to the slain Supreme Leader Ayatollah Ali Khamenei.

A few days before, when Mojtaba's (considered a hardliner) name was doing rounds as the new leader, U.S. President Donald Trump refused to accept him and asserted that the U.S. would pick a suitable leader for Iran. Trump also demanded the unconditional surrender of the Iranian forces.

While the U.S. and Israel continue bombarding Iran, Iran launched strikes across nearly nine countries in the gulf region targeting U.S. military bases.

Reportedly, the U.S. government has endorsed the sale of thousands of BLU-110A/B general-purpose bombs to the Israeli Air Force.

Oil and energy transit via the Strait of Hormuz has suffered a major disruption since Iran is targeting ships traversing the vital shipping route.

As the war seems to go on with no end in sight, crude oil prices have catapulted more than 20%. WTI crude oil for April delivery was last seen trading at $95.15, up by $4.25 (or 9.24%).

The U.S. Dollar Index was last seen trading at 99.07.

Global indices fell today especially in Asia. Of note, Asian economies rely on gulf oil supply which has now come to a halt, triggering massive economic concerns.

Despite the underlying support from the safe-haven demand arising from the possibility of the gulf war prolonging, the precious metal took a dip today after experts viewed that major global central banks would adopt a more "hawkish" stance in the coming days owing to inflation concerns.

Last Friday, Federal Reserve Bank of Cleveland President Beth Hammack stated that rates should remain on hold for quite some time to check inflation.