Gold prices slipped on Monday as a resurgent US dollar created fresh headwinds, even though escalating conflicts in the Middle East continued to fuel safe-haven demand. Spot gold fell 0.79 percent to $4,791.01 per ounce during early trading hours.
Geopolitical Risks Support Prices
Renewed disruptions in the Strait of Hormuz drove oil prices sharply higher by over 6 percent. This surge revived inflation fears and strengthened the US dollar index along with Treasury yields. Investors watched nervously as the United States seized an Iranian vessel, prompting Tehran to threaten retaliation and cast doubt on any short-lived ceasefire.
These developments pushed many market participants toward gold for protection. However, the stronger dollar made the precious metal more expensive for buyers using other currencies. At the same time, rising 10-year US Treasury yields by 0.5 percent reduced the appeal of non-yielding assets like gold.
Market Sentiment Remains Mixed
Shifting from supportive to more aggressive behavior, gold has fallen by about 8 percent from its peak around mid-February following escalating hostilities between the United States and Israel against Iran.
Silver fell by 0.5% to trade at $80.36 per troy ounce, whereas platinum was unchanged around $2,103.38. At the same time, palladium dropped modestly. Global stock markets became highly volatile amid the slowdown in sea traffic from the Persian Gulf.
Although gold has experienced recent selling pressure, most investors consider gold a good investment hedge against geopolitical events and inflation threats.
