Gold prices edged lower Monday in early Asian trading, as escalating geopolitical tensions in the Middle East drove investors to seek refuge in the U.S. dollar rather than the traditional haven of precious metals.
Spot gold slipped 0.2% to $3,360.11 an ounce, while gold futures dipped 0.3% to $3,374.72 by 01:08 ET (05:08 GMT). The modest decline follows strong gains earlier this month as markets reacted to the growing conflict between Israel and Iran.
Over the weekend, the United States launched a targeted military strike on three Iranian nuclear sites. President Donald Trump stated that the attack had neutralized key facilities to prevent Iran from advancing its nuclear ambitions. Tehran denied the accusations and vowed retaliation, raising fears of broader regional instability.
Investors responded by shifting capital toward the dollar, which rose 0.3% against a basket of major currencies. The move highlighted a temporary preference for dollar-backed assets over gold amid expectations of protracted geopolitical fallout and persistent inflationary pressure.
Middle East Tensions Spark Inflation Concerns
Beyond the immediate market reaction, the attack has renewed concerns about energy supply disruptions, particularly if Iran retaliates by attempting to block the Strait of Hormuz—a crucial chokepoint for global oil shipments.
Heightened fears of rising oil prices have rekindled anxiety over global inflation. In turn, this could prompt central banks, especially the U.S. Federal Reserve, to delay any interest rate cuts.
Key takeaways:
- Oil prices surged on fears of supply disruption in the Persian Gulf.
- Traders are recalibrating inflation expectations globally.
- Fed officials, including Chair Jerome Powell, are expected to offer more policy insight in congressional testimony this week.
The Fed’s recent signals about holding interest rates steady have already bolstered the dollar, making non-yielding assets like gold comparatively less attractive.
Platinum, Silver Retreat After Strong Run
Precious and industrial metals followed a similar cooling trend Monday.
- Platinum: Down 0.1% to $1,263.15/oz, easing from last week’s 4-year high.
- Silver: Up 0.1% to $36.05/oz, holding near a 13-year peak.
- Copper: London futures dipped 0.1% to $9,643.15/ton; U.S. futures slipped 0.3% to $4.820/lb.
Despite the short-term pullback, broader metal markets remain volatile amid rising geopolitical and inflationary risks. Investors are expected to remain cautious as they monitor both military developments and macroeconomic signals.
