Gold Prices Rebound Slightly Amid Middle East Tensions
Gold prices moved modestly higher during Asian trading on Tuesday, recovering from one-month lows as investors assessed rising geopolitical tensions in the Middle East and efforts by Donald Trump to secure shipping routes through the Strait of Hormuz.
Spot gold increased by 0.5% to $4,546.75 per ounce, while U.S. gold futures for June delivery also gained 0.5%, reaching $4,556.10.
Recent Decline Keeps Pressure on Gold
Despite the slight rebound, gold remains under pressure after dropping more than 2% in the previous session, marking its lowest level since late March.
Escalating US-Iran Conflict Drives Market Uncertainty
Tensions between the United States and Iran intensified, with markets closely watching developments in the Gulf region.
Both sides carried out fresh attacks targeting control of the Strait of Hormuz, a vital route for global energy shipments, effectively ending a fragile ceasefire.
The U.S. military reported destroying several Iranian attack boats during confrontations in the area. Meanwhile, Iran expanded the conflict by launching strikes on the United Arab Emirates, hitting a key oil facility at Fujairah port with missile and drone attacks.
Shipping Security Efforts and Ongoing Risks
These developments follow Trump’s “Project Freedom” initiative, aimed at protecting vessels and reopening critical shipping lanes in the region. While the plan has raised hopes of stabilizing supply chains, uncertainty around further escalation continues to weigh on markets.
Inflation Concerns Limit Gold’s Upside
Rising tensions have driven oil prices higher, fueling inflation concerns. Analysts from ING Group noted that increasing energy costs could keep interest rates elevated for longer than expected.
Higher rates typically reduce the appeal of non-yielding assets like gold, limiting its upward momentum despite geopolitical risks. Analysts also pointed out that the market is currently more focused on rising U.S. Treasury yields than on safe-haven demand.
Gold prices have declined more than 10% since the conflict began in late February, as persistent inflation and expectations of tighter monetary policy offset demand for safe-haven assets.
Other Metals Show Mixed Performance
Among other precious metals, silver rose 0.7% to $73.23 per ounce, while platinum gained 1.9% to $1,983.26 per ounce.
In industrial metals, benchmark copper futures on the London Metal Exchange slipped 0.3% to $12,930.33 per ton, while U.S. copper futures climbed 0.9% to $5.91 per pound.
