Gold prices rose during Asian trading on Wednesday, recovering part of the sharp losses seen in the previous session as investors reassessed demand for safe-haven assets amid escalating tensions between the United States and Iran and a strong rally in the U.S. dollar.
Spot gold gained 1.2% to $5,150.63 per ounce by 01:45 ET (06:45 GMT), while U.S. gold futures advanced 0.8% to $5,166.40.
The precious metal had dropped 4.5% on Tuesday as a surge in the dollar and higher U.S. Treasury yields weighed heavily on bullion prices.
Strong dollar curbs gold’s upside
The US Dollar Index held steady after climbing nearly 1.5% over the previous two trading sessions, reaching a six-week high overnight as investors sought safety and scaled back expectations for Federal Reserve rate cuts in the near term.
A stronger dollar typically limits gains in gold because it makes the metal more expensive for buyers using other currencies, which can reduce global demand.
At the same time, geopolitical risks in the Middle East helped provide some support to bullion. The conflict between the United States and Iran intensified after coordinated U.S. strikes on targets tied to Tehran triggered threats of retaliation from Iranian officials, raising fears of broader instability across the region.
Investors are increasingly concerned that the confrontation could disrupt energy flows and potentially involve additional regional players.
Rising oil prices complicate central bank outlook
Oil prices remained elevated as markets evaluated the risk of supply disruptions, particularly along major shipping routes in the Gulf. Higher crude prices have added to inflation concerns, complicating the policy outlook for central banks worldwide.
Analysts noted that gold is currently being pulled in two directions: safe-haven demand driven by geopolitical uncertainty on one side, and macroeconomic pressure from a stronger dollar and higher bond yields on the other.
Among other precious metals, silver rose 3% to $84.44 per ounce after dropping more than 8% in the previous session.
Platinum climbed 2.8% to $2,148.50 per ounce following a roughly 10% plunge on Tuesday.
Benchmark copper futures on the London Metal Exchange edged up 0.8% to $13,049.33 per ton, while U.S. copper futures rose 1.1% to $5.89 per pound.
In China, official PMI figures indicated that manufacturing activity remained in contraction territory, while private-sector surveys from RatingDog PMI pointed to stronger-than-expected expansion, highlighting mixed signals about the pace of economic activity in the country.
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