Gold prices have fallen as US President Donald Trump’s swift rejection of Iran’s response to a peace proposal stokes inflation concerns and weighs on the outlook for interest rates, Reuters reports.

Spot gold was down 0.5 per cent at $4,692.49 per ounce, as of 8:45am EDT (5:45pm PKT). US gold futures lost 0.6pc to $4,701.30.

“Inflation concerns have risen after the United States rejected Iran’s response, while constraints in the Strait of Hormuz are adding to these pressures and working against gold, as elevated inflation could keep interest rates higher,” said Jim Wyckoff, market analyst at American Gold Exchange.