(Bloomberg) — Gold held a decline as a lack of progress in reopening the Strait of Hormuz continued to fan inflation concerns that sent bond markets tumbling.

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Bullion fell as much as 1.3% before paring most of the losses to trade around $4,535 an ounce, after retreating almost 4% last week. The US and Iran remained far apart on a deal to end weeks of war and reopen Hormuz, a vital waterway for energy flows that remains effectively closed. Oil climbed on Monday after President Donald Trump rewed threats against Iran, raising the odds of a rate hike that would weigh on non-yielding bullion.

The precious metal has traded in a fairly narrow range since falling sharply in the early days of the war, as investors assess inflation risks that could keep rates higher and growth concerns that could prompt monetary easing as the conflict drags on. Bullion is down around 14% since the conflict started.

A drone attack on Sunday that sparked a fire at a United Arab Emirates nuclear plant spotlighted the risks of the fragile ceasefire in the Middle East.

Bond markets tumbled around the world on growing fears a war-driven surge in inflation will pressure central banks into raising interest rates. The rout sent yields surging as doubts mounted over how quickly Middle East oil supplies can return to normal.

As yields climb, “gold’s risk-reward profile has deteriorated, prompting investors to unwind their positions,” Daniel Hynes, senior commodity strategist at ANZ Group Holdings Ltd., said in a note. However, they expect central banks to eventually pivot to monetary easing on growth concerns, supporting gold. The group forecasts gold to rally to $6,000 an ounce by mid-2027.

India’s gold demand, hit by stricter import policies, is likely to be offset by firmer demand from China. Bullion imports into India have slowed to a trickle as traders grapple with the higher duties. Over the weekend, the nation further tightened the rules for silver imports in a bid to defend its currency, which has sunk to an all-time low.

Meanwhile, traders will be keeping tab on minutes of the US Federal Reserve’s April Meeting this week for clues on the future path for rates.

Spot gold was 0.1% lower at $4,536.26 an ounce as of 1:06 p.m. in Singapore. Silver declined 0.8% to $75.22, after falling more than 5% last week. The Bloomberg Dollar Spot Index, a gauge of the greenback, was 0.1% higher after gaining 1.2% last week.