Gold Faces Pressure Amid US-Iran Tensions and Fed Rate Outlook

Gold prices retreated sharply on Monday, with XAU/USD trading at $5,099.87, down $71.64 (-1.39%) as of 16:51 GMT+2. Investors are closely monitoring developments in the Middle East, particularly the escalating tensions involving the United States and Iran, which have kept safe-haven demand elevated but volatile.


Safe-Haven Demand Under Strain


Although geopolitical uncertainty typically supports gold, the metal has struggled to hold gains above key levels. After opening near $5,172, gold plunged toward $5,015 during intraday trading, reflecting a combination of profit-taking and pressure from a stronger US dollar. Analysts note that the market is currently navigating a delicate balance between risk aversion and technical selling, with the metal’s year-to-date gain at 17.92% still signaling strong underlying demand.


Oil and Inflation Concerns


Meanwhile, crude oil prices have surged due to fears of supply disruptions in the Middle East, adding to global inflation concerns. This has traditionally bolstered gold as a hedge against uncertainty, yet rising yields and dollar strength have offset much of that effect, keeping bullion under pressure.


Market Outlook

Technical indicators suggest that gold may test its critical support near $5,000, with resistance around $5,172–$5,200. Investors will be watching upcoming US economic data and Fed policy signals closely, as these factors are likely to dictate whether gold can regain momentum or continue facing headwinds in the short term.