WASHINGTON: Gold prices dipped on Monday as investors leaned towards the US dollar for safety after Washington launched strikes on Iranian nuclear sites over the weekend. Markets are now watching closely to see how Iran responds.
By 0735 GMT, spot gold was down 0.4 per cent at $3,355.40 an ounce, while US gold futures slipped 0.5 per cent to $3,370.30.
“The US strikes on Iranian nuclear facilities prompted safe-haven flows into the dollar, which ended up putting the brakes on gold,” said Tim Waterer, Chief Market Analyst at KCM Trade. “Despite the rising risks in the region, gold’s reaction has been surprisingly quiet because of the stronger greenback.”
The US dollar rose 0.3 per cent against a basket of major currencies, making gold, which is priced in dollars, more expensive for international buyers.
Over the weekend, US forces targeted Iranian military and nuclear installations, including a bombing run on the area above Iran’s Fordow nuclear site with 30,000-pound bunker-buster bombs.
The move came amid rising tensions, with US President Donald Trump raising the possibility of a regime change in Tehran. Top US officials also warned Iran against retaliating.
Tehran has vowed to defend itself, and tensions escalated further as Iran and Israel exchanged fresh missile strikes. Israel said its jets had hit military positions in western Iran.
Despite the rising conflict in the Middle East, financial markets held relatively steady. Shares slipped slightly across Asia, and oil briefly touched a five-month high, but there were no signs of widespread panic.
Back in the US, the Federal Reserve’s latest report to Congress, released on Friday, noted that inflation remains somewhat elevated and the jobs market is still strong.
On the technical side, analysts say gold could test support at $3,348 an ounce, and if it falls below that level, it might head down to $3,324.
In other precious metals, silver inched up 0.3 per cent to $36.10 per ounce, platinum rose 0.2 per cent to $1,267.76, and palladium climbed 1.4 per cent to $1,059.20.
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