Noor Trends News, Technical Analysis, Educational Tools and Recommendations
Gold prices experienced a slight pullback in Asian trade on Monday, with a stronger dollar weighing on the yellow metal. Despite the minor drop, gold remained supported by haven demand stemming from the escalating Israel-Iran conflict.
Spot gold fell by 0.1% to $3,427.78 per ounce, while August gold futures dropped 0.2% to $3,446.45 per ounce as of 00:57 ET (04:57 GMT). The modest decline followed a nearly 4% surge in gold prices last week, with some profit-taking taking place after the strong rally.
Gold Supported by Israel-Iran Conflict, U.S. Intervention in Focus
Gold’s strong performance last week was largely driven by heightened geopolitical tensions, following Israel’s airstrikes on Iranian nuclear and military sites. In response, Iran launched a series of missile strikes on major Israeli targets, including the financial capital, Tel Aviv, with some missiles reportedly breaking through Israel’s “Iron Dome” defense system.
The escalation of hostilities has raised concerns about a broader regional conflict and the potential involvement of other powers in the Middle East. Gold, traditionally viewed as a safe-haven asset during times of geopolitical uncertainty, saw increased demand as traders sought protection in the yellow metal.
The focus is now on any potential U.S. intervention in the conflict, after President Donald Trump indicated that his administration was working toward a resolution. However, Trump also suggested that Israel and Iran may need to “fight it out,” signaling that a ceasefire may not be imminent. Furthermore, Iran canceled planned nuclear talks with the U.S., further diminishing the chances of a diplomatic de-escalation.
Dollar Strength Pressures Gold and Metal Markets
Gold’s rally was tempered by a stronger U.S. dollar, which rose about 0.1% in Asian trade. The dollar gained some favor as a haven asset amid the geopolitical turmoil, with increased positioning ahead of the U.S. Federal Reserve’s meeting later this week.
Broader metal prices also weakened in response to the dollar’s strength. Platinum futures, however, extended their recent rally, rising nearly 1% to $1,224.00 per ounce, marking a four-year high. In contrast, silver futures fell 0.3% to $26.260 per ounce.
In the industrial metals sector, benchmark copper futures on the London Metal Exchange fell 0.1% to $9,627.75 per ton, while U.S. copper futures dropped 0.4% to $4.7972 per pound.
Focus on the Federal Reserve’s Decision and Comments
The market’s attention is now squarely focused on the Federal Reserve’s meeting this week, where policymakers are expected to keep interest rates unchanged. Investors will be closely watching U.S. Federal Reserve Chair Jerome Powell’s comments on the path of interest rates, especially amid signs of cooling inflation and slowing economic growth.
Gold prices are under some pressure due to a stronger dollar and profit-taking after last week’s sharp gains, but remain supported by heightened geopolitical tensions between Israel and Iran. The broader precious metals market also saw mixed movements, with platinum outperforming while silver and industrial metals experienced losses. As the Federal Reserve meeting approaches, market sentiment will likely be influenced by any signals on future rate changes, as well as developments in the Israel-Iran conflict.
