Gold prices drop globally amid rising Middle East tensions

ISLAMABAD: The price of gold fell on Monday as investors turned to the US dollar as a haven after Washington attacked Iranian nuclear facilities over the weekend.

Spot gold dropped 0.4 per cent to $3,355.40 an ounce by 0735 GMT, and US gold futures fell 0.5 per cent to $3,370.30.

The US attacks on Iranian nuclear sites triggered safe-haven flows into the dollar, which ultimately kept gold in its place,” stated Tim Waterer, Head of Market Analysis at KCM Trade. “Despite increased risks in the area, gold’s response has been comparatively muted due to the stronger greenback.

The US dollar increased 0.3 per cent against a basket of major currencies, increasing the cost of gold, priced in dollars, for overseas buyers.

The US military over the weekend bombed Iranian military and nuclear facilities, including a bombing raid on the area over Iran’s Fordow nuclear facility using 30,000-pound bunker-busters.

The action followed heightened tensions, with US President Donald Trump opening the door to a regime change in Tehran. Senior US officials also cautioned Iran against striking back.

Tehran has promised to defend itself, and tensions further rose as Iran and Israel exchanged new rounds of missile strikes. Israel stated that its aircraft had struck Iranian military sites in western Iran.

Even with the mounting tensions in the Middle East, financial markets themselves remained fairly steady. Stocks dipped marginally in Asia, and briefly reached a five-month high for oil, but no one experienced signs of mass panic.

In the US, meanwhile, the most recent report to Congress from the Federal Reserve said inflation is still a bit higher and the job market is still robust.

Technically, analysts indicate that gold may test support at $3,348 an ounce, and if it goes below that, it may dip to $3,324.

Other precious metals saw silver move 0.3 per cent higher to $36.10 per ounce, platinum increase by 0.2 to $1,267.76, and palladium gain 1.4 per cent to $1,059.20.