Gold prices rose in Asian trading on Wednesday after tumbling nearly 5% in the previous session, as investors reassessed safe-haven demand amid an escalating U.S.–Iran conflict and a sharply stronger U.S. dollar.
Spot gold was last up 1.4% at $5,158.27 an ounce by 20:17 ET (01:17 GMT). U.S. Gold Futures rose 0.8% to $5,166.40.
The yellow metal dropped 4.5% on Tuesday, driven by a surge in the dollar and rising U.S. Treasury yields.
The US Dollar Index edged 0.2% during Asian hours after climbing 0.7% to six-week highs overnight, buoyed by haven demand and reduced expectations for aggressive Federal Reserve rate cuts in the coming months.
A stronger dollar makes gold more expensive for holders of other currencies, dampening international demand.
Ongoing geopolitical tensions in the Middle East lent support to bullion. The conflict between the U.S. and Iran widened after coordinated U.S. strikes on Iranian-linked targets drew retaliatory threats from Tehran, stoking fears of broader regional instability.
Investors have grown increasingly concerned that the confrontation could disrupt energy supplies and draw in other regional powers.
Oil prices remained elevated on concerns about potential supply disruptions, particularly around key shipping routes in the Gulf. Rising crude prices have added to inflation worries, complicating the outlook for global central banks and reinforcing gold’s appeal as a hedge against geopolitical and price risks.
Analysts said the precious metal is currently caught between competing forces: safe-haven flows driven by geopolitical uncertainty and macroeconomic headwinds stemming from dollar strength and elevated yields.
Among other precious metals, Silver prices jumped 1.6% to $83.38 per ounce, while platinum gained 0.3% to $2,124.48/oz.
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