Gold Slips Slightly as Strong Dollar Offsets Geopolitical Safe-Haven Demand
Gold prices edged lower in Asian trading on Monday, pressured by a firm U.S. dollar, despite lingering support from safe-haven demand as the Israel-Iran conflict continued to escalate.
Following a nearly 4% surge last week, some profit-taking emerged, dragging down prices. A resilient dollar—buoyed by investor caution ahead of the upcoming Federal Reserve meeting—also weighed on the broader metals market.
As of 00:57 ET (04:57 GMT), spot gold dipped 0.1% to $3,427.78 an ounce, while August gold futures fell 0.2% to $3,446.45 per ounce.
Geopolitical Turmoil Lifts Gold, Eyes on U.S. Role
Last week’s sharp rally in gold was fueled by intensifying conflict after Israel launched attacks on several Iranian targets, including nuclear facilities near Tehran.
In response, Iran retaliated with a barrage of missile strikes on key Israeli locations, including Tel Aviv. Reports suggested that some of these missiles breached Israel’s “Iron Dome” defense system.
The confrontation has heightened fears of a broader regional war, with speculation mounting over whether other Middle Eastern nations might be drawn in.
Investors are also monitoring the potential for U.S. involvement. President Donald Trump mentioned efforts to broker a deal but also acknowledged that Israel and Iran may need to resolve their conflict through further fighting—indicating that a ceasefire may not be imminent.
Over the weekend, Iran called off planned nuclear negotiations with the United States, further dampening hopes for de-escalation.
Amid the turmoil, gold benefited from a flight to safety, as market participants turned to bullion in search of security.
Dollar Gains Weigh on Metals Ahead of Fed Decision
Despite gold’s recent upside, its momentum paused due to strength in the dollar, which gained 0.1% in Asian trade, partly due to its own appeal as a safe-haven asset.
Investors are now focused on the Federal Reserve’s upcoming meeting. While interest rates are expected to remain unchanged, markets will closely watch Chair Jerome Powell’s statements for clues on the future rate trajectory, particularly as signs of slowing inflation and economic growth emerge.
The dollar’s strength put pressure on other precious and industrial metals:
- Platinum extended gains, rising nearly 1% to $1,224.00 per ounce, continuing its rally to a more-than-four-year high.
- Silver slipped 0.3% to $26.260 per ounce.
- Copper prices also retreated: London futures dipped 0.1% to $9,627.75 per metric ton, and U.S. copper futures fell 0.4% to $4.7972 per pound.
