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Gold Slides as U.S. Plan to Guide Ships Through Hormuz Starts Monday

Oil near $110 lifts rate fears that weigh on bullion.

Overview

  • Project Freedom, which begins Monday, would guide commercial ships not involved in the conflict through the Strait of Hormuz, according to President Trump’s weekend announcement.
  • The U.S.-led Joint Maritime Information Center set an enhanced security area south of usual lanes and warned that standard routes are extremely hazardous because naval mines have not been cleared.
  • Iran’s navy said it turned away U.S. warships and warned merchants not to sail without its approval, while U.S. Central Command said no American ships were hit.
  • Gold dropped as much as 1.9% in London trading to around $4,562–$4,571 an ounce, while Brent crude moved back above $110 and a stronger dollar added pressure on bullion.
  • Despite the selloff, central banks increased gold reserves at the fastest pace in over a year in the first quarter, and Tether kept buying, becoming the largest known holder outside banks and governments.