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The US dollar rate is expected to rise as the inflation fears and Iran war clouds US rate outlook

Gold prices were pushed lower on Monday in a thinly traded session, as inflation fears clouded U.S. monetary policies outlook. Meanwhile, markets waited for developments in U.S. Iran peace negotiations.

As of 0655 GMT, spot gold was down 0.5% to $4,588.71 an ounce. U.S. Gold Futures for June Delivery fell 0.9% to $4,560.60.

The markets in China, Japan, and the UK will be closed on holidays.

Jerome Powell, the Federal Reserve chair, 'ended his eight-year tenure as head of U.S. Central bank on Wednesday. Interest rates were held and inflation concerns increased.

Tim Waterer is the chief market analyst for KCM Trade. He said that gold was still feeling the effects of the Fed's hawkish messaging from last week, particularly the dissenting voices who pushed back against any further easing.

Federal Reserve officials who dissented from the policy statement made last week said that the U.S. should not be tempted to cut interest rates due to the shock caused by the 'Iran war.

A rise in oil prices may encourage central banks, who will then hold their interest rates at a higher level for longer. This would put pressure on non-yielding investments such as gold.

The oil prices have eased, but remain above $100 a barrel. Lack of clarity around a possible U.S. Iran peace deal remains the main focus.

Donald Trump announced that the United States will begin helping to free ships stuck in the 'Gulf due to the U.S. and Israeli war against Iran, starting Monday. A tanker had reported being 'hit by unknown.projectiles? in the Strait of Hormuz.

Iranian state media reported Washington's response to Iran’s 14-point offer via Pakistan and that Tehran is now reviewing it.

We see gold trading largely in the $4,400 to $5,500 range by the end of this year. Waterer said that the upper half of this range would be dependent on a sustained reduction in Middle East tensions as well as a?decrease in inflation pressures. Meanwhile, persistently high oil prices would push the metal toward the lower end of the range.

Spot silver dropped 0.6%, to $74.91 an ounce. Platinum remained at $1.989 and palladium fell 0.4%, at $1.519.78.

(source: Reuters)