Gold Slips Slightly but Holds Firm Amid Israel-Iran Tensions and Strong Dollar

Gold prices dipped slightly in Asian trade on Monday, pressured by a firmer U.S. dollar and some profit-booking after last week’s sharp rally. However, the yellow metal continued to hold near multi-month highs as escalating conflict between Israel and Iran kept demand for safe-haven assets elevated.

By 00:57 ET (04:57 GMT), spot gold eased 0.1% to $3,427.78 an ounce, while August gold futures were down 0.2% at $3,446.45/oz.

Israel-Iran Conflict Drives Flight to Safety

Gold’s strong performance last week — nearly a 4% surge — was largely driven by geopolitical uncertainty. The metal’s haven appeal was reinforced as Israel launched strikes on Iranian targets, reportedly including nuclear sites, prompting Iran to retaliate with missile attacks on Israeli financial centers such as Tel Aviv.

The conflict has sparked fears of wider regional escalation and potential intervention by major powers. President Donald Trump stated that while diplomatic efforts were underway, Israel and Iran might have to “fight it out,” underscoring the fragile nature of any ceasefire negotiations.

Iran also canceled scheduled nuclear talks with the U.S., dealing a blow to deescalation hopes and reinforcing gold’s upward momentum.

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Dollar Strength Caps Gold's Upside

Despite safe-haven flows, gold’s gains were limited by a resilient dollar ahead of a key Federal Reserve meeting this week. The Fed is expected to hold interest rates steady, but investors are keenly awaiting comments from Chair Jerome Powell for clues about the future rate path.

A stronger dollar typically dampens demand for dollar-denominated commodities like gold, as it raises the cost for foreign buyers.

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Outlook: Caution and Volatility Ahead

• With Middle East tensions far from resolved, safe-haven demand is likely to remain a key theme for gold.

• Any signals of U.S. involvement in the Israel-Iran conflict or further disruptions to oil supply could provide additional support.

• Conversely, a hawkish tone from the Federal Reserve could put near-term pressure on gold by bolstering the dollar.

Final Word

While gold pulled back slightly on Monday, the broader geopolitical and economic backdrop remains favorable for continued strength. Traders and investors will stay alert to both developments in the Middle East and the Fed’s messaging for guidance on the metal’s next move.