Gold slips as traders await Iran’s response

Bengaluru — Gold prices edged lower on Monday as investors favoured the dollar after the US attack on key Iranian nuclear sites at the weekend, with markets closely watching for Iran's response.

Spot gold was down 0.2% at $3,362.29/oz by 3.41am GMT. US gold futures fell 0.2% to $3,378.

“The US strikes on Iranian nuclear facilities resulted in the dollar receiving safe haven buying flows in the currency market,” KCM Trade chief market analyst Tim Waterer said.

“This dollar uptick had pegged gold back and caused an uncharacteristically subdued performance from the precious metal despite risks stemming from the conflict.”

The dollar rose 0.2% against its rivals, making gold more expensive for other currency holders.

US President Donald Trump on Sunday raised the question of a regime change in Iran after US strikes against key military sites at the weekend, as senior officials in his administration warned Tehran against retaliation.

Iran vowed to defend itself a day after the US dropped 30,000-pound bunker-buster bombs onto the mountain above Iran’s Fordow nuclear site.

Meanwhile, Iran and Israel continued to trade volleys of missile attacks. An Israeli military spokesperson said Israeli fighter jets had struck military targets in western Iran.

Shares slipped in Asia on Monday and oil prices briefly hit five-month highs, but there were no signs of panic selling across markets.

The Federal Reserve’s latest monetary policy report to Congress, released on Friday, said US inflation remained somewhat elevated and the labour market was solid.

On the technical front, spot gold could retest support at $3,348 /oz, a break below could open the way towards $3,324, said Reuters technical analyst Wang Tao.

Elsewhere, spot silver rose 0.2% at $36.07/oz, platinum edged 0.1% higher to $1,269.17, while palladium gained 0.2% to $1,046.62.

Reuters