Gold prices dipped on Monday in Asian markets as investors flocked to the dollar for safety following U.S. strikes on Iranian nuclear facilities, increasing geopolitical uncertainty in the Middle East.

Dollar Emerges as Safe-Haven Asset

The price of spot gold fell 0.2% to $3,360.11 per ounce, while gold futures declined 0.3% to $3,374.72 in early trading. Following a previous rally due to the Israel-Iran conflict, demand shifted towards the dollar, which strengthened over 0.3% against major currencies.

The market reaction followed President Donald Trump’s confirmation of airstrikes on three Iranian nuclear sites, which he claimed had eradicated aspects of their nuclear capabilities. Unverified reports stoked fears of retaliation from Tehran, particularly the threat to block the Strait of Hormuz, a crucial global oil transit route.

Geopolitical Risks Support Oil, Neglect Gold

Typically, gold benefits from conflict, yet the strength of the dollar and concerns over persistently high interest rates spurred by rising energy costs limit gold’s upside potential.

The Federal Reserve’s hawkish stance last week and tentative guidance on future rate reductions have further bolstered the dollar’s position. Traders now await a significant testimony from Fed Chair Jerome Powell, scheduled to start on Tuesday.

Platinum and Silver Show Weakness After June Highs

Other precious metals also saw declines:

• Platinum futures dropped 0.1% to $1,263.15 per ounce, down from a four-year peak.

• Silver futures increased slightly by 0.1% to $36.05 per ounce, but remained near a 13-year high.

These metals had outperformed gold in recent weeks due to supply issues and robust industrial demand, especially from China.

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