Gold edged lower in early trading across Asian markets on Monday as investors shifted their preference toward the U.S. dollar following recent American strikes on Iranian nuclear facilities. This move toward the greenback weighed on gold’s momentum, tempering its gains amid rising geopolitical concerns.
Spot gold declined by 0.2% to $3,360.11 an ounce, while gold futures fell 0.3% to $3,374.72 by 01:08 ET (05:08 GMT). Despite the pullback, gold remains elevated compared to levels earlier this month, buoyed by ongoing uncertainty related to the conflict between Israel and Iran.
Stronger Dollar Dents Precious Metals
The downward pressure on gold was largely driven by a firmer U.S. dollar, which climbed more than 0.3% against a basket of major currencies. The dollar’s strength was fueled by worries over escalating unrest in the Middle East and speculation that persistent inflation could keep U.S. interest rates higher for longer.
Over the weekend, U.S. forces launched attacks on three Iranian nuclear sites, which President Donald Trump declared as successfully neutralized targets. The strikes stemmed from concerns over Iran’s nuclear ambitions, allegations the Iranian government denies.
This escalation heightened regional tensions, with Iran threatening retaliation, including the possibility of closing the Strait of Hormuz, a crucial passageway for global oil shipments. These fears drove crude oil prices upward, adding to inflationary pressures and bolstering demand for the dollar.
Focus Shifts to Federal Reserve Signals
Market participants are now turning their attention to remarks expected from Federal Reserve Chair Jerome Powell during his upcoming testimony before Congress beginning Tuesday. The Fed’s recent cautious stance on potential rate cuts has already contributed to the dollar’s recent gains.
Platinum and Silver Retract Gains
Other precious metals saw slight declines as well. Platinum futures eased 0.1% to $1,263.15 per ounce after hitting a four-year peak last week. Silver futures inched up 0.1% to $36.05 per ounce, remaining near their highest point in over 13 years.
Among industrial metals, copper prices experienced a modest dip. Contracts on the London Metal Exchange fell 0.1% to $9,643.15 per ton, while U.S. copper futures dropped 0.3% to $4.82 per pound.