Gold price continues to remain on the lower threshold after hitting its lowest level since July 1. Spot gold fell 3 per cent to $3,998.52 an ounce while spot silver fell 3.8 per cent to $57.56 an ounce.Gold prices fell 3 per cent on Monday after U.S. President Donald Trump said he was reinstating a naval blockade on Iran, boosting oil markets, reigniting inflation concerns and raising prospects of higher-for-longer ​U.S. interest rates. Spot gold fell for ​the second straight session, down 3 per cent at $3,996.76 per ounce.Why is Gold Price Down?as fears of ​a closure of the Strait ​of Hormuz drove oil prices sharply higher, reviving expectations of elevated ​interest rates to combat inflationary pressures from escalating hostilities in the Middle East."Any breakout of violence in the Gulf is accompanied by pressure on gold," said Nicholas ​Frappell, global head of institutional markets at ABC ⁠Refinery. "The question is, ‌if the Strait of Hormuz remains effectively or partially closed, ​does that ​lead to a deflationary effect, further down the road, that ⁠might actually be supportive for gold if you have demand ​destruction leading to lower economic activity," Frappell added.Kevin Warsh's first ​semiannual testimony before Congress as Federal Reserve chair, along with a slate of key U.S. economic data, including June CPI, PPI and retail sales, will be closely watched this week for fresh clues on the economy, inflation and the monetary policy outlook.Remarks from Fed policymakers, including Vice Chair Michelle Bowman and Governor Christopher ‌Waller, later in the day are also in focus as they could provide insights on how inflationary pressures are affecting the central ​bank's stance ​on interest rate hikes.Traders ⁠are currently pricing in a 72 per cent chance of a U.S. Fed interest rate hike in September, up from about 63 per cent last week, according to the CME FedWatch Tool.COMEX ​gold speculators trimmed their net long positions by 1,964 contracts to 114,854 in the week to July 7, data released on Friday showed, following three consecutive weeks of increases.