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Gold prices fell below $5,100 on Monday as West Texas Intermediate (WTI) crude oil surged over 30% near $113 per barrel due to shipping disruptions in the Strait of Hormuz. The XAU/USD pair traded at $5,090, reflecting a 1.50% decline from its opening level. The oil price spike strengthened the US Dollar, reducing demand for gold as investors shifted toward energy commodities amid geopolitical tensions in the Middle East. The move highlights the inverse relationship between gold and the US Dollar. A stronger Dollar makes gold more expensive for holders of other currencies, potentially deterring investment. Traders are also monitoring how oil price volatility impacts global inflation and central bank policies, which could influence gold's appeal as a hedge asset. For Gulf investors, the Hormuz situation remains critical as regional oil infrastructure is vulnerable to disruptions. Key watchpoints include OPEC+ policy adjustments, US Federal Reserve rate decisions, and geopolitical developments in the Persian Gulf. Gold's technical support at $5,000 and resistance at $5,250 will be pivotal for near-term price direction.
