Gold struggles as dollar strength persists—this theme shaped market sentiment throughout recent developments in Iran. On Monday, investors reacted swiftly after the United States launched a significant military strike on Iranian nuclear sites. Instead of rushing toward gold, which often acts as a traditional safe haven, traders favored the strong U.S. dollar.
The U.S. dollar rose in value as investors sought stability amid heightened geopolitical tension. This strong U.S. dollarpushed gold prices lower because it made the metal more expensive for international buyers. As a result, spot gold slipped by 0.4%, landing at $3,355.40 per ounce. Simultaneously, U.S. gold futures also dipped by 0.5%, reaching $3,370.30.
In response to the strikes, Iran vowed to defend its sovereignty. The Iranian government expressed outrage after U.S. forces dropped massive bombs near the Fordow nuclear site. The retaliation threat from Iran added more weight to the already volatile Middle East tensions. Despite the danger of broader regional conflict, gold remained unusually steady.
Tim Waterer, a market analyst, noted that the strong U.S. dollar limited gold’s usual upward movement during crises. Instead of surging, gold posted a calm performance, which contrasted with past reactions to conflict.
In parallel, Iran and Israel continued exchanging missile attacks. The Israeli military confirmed strikes on targets in western Iran, escalating worries about prolonged instability. Even so, Asian stock markets only saw mild losses, and oil prices briefly spiked to five-month highs.
At the same time, the U.S. Federal Reserve released a new report, which reaffirmed strong labor market conditions and slightly elevated inflation. This economic backdrop also supported the dollar’s climb.
Technically, gold might test a support level near $3,348. If prices fall below that point, analysts see a path toward $3,324 per ounce. Other precious metals reacted differently. Silver increased by 0.3%, platinum rose 0.2%, and palladium advanced by 1.4%.
As markets watch closely for Iran’s next move, uncertainty hangs in the air. However, one thing remains clear—the strong U.S. dollar continues to dominate global asset pricing in this volatile period.