Gold prices were little changed during Tuesday's Asian session after touching fresh multi-month highs earlier in the day, as a slightly stronger United States dollar offset support from heightened geopolitical tensions and concerns over inflation.
By 4:15 pm AEST (6:15 am GMT), spot gold was trading 0.1% lower at US$4,647.57 an ounce.
The U.S. dollar remained supported amid a risk-off environment extending into Tuesday, with weakness in technology stocks, fresh U.S. sanctions on Iran and a renewed rise in oil prices weighing on investor sentiment.
U.S. Treasury Secretary Scott Bessent said on Monday that Washington was launching an "economic onslaught" against Iran's financial connections around the world.
Iranian Economy Minister Ali Madanizadeh responded on Tuesday: "Naturally, the enemies intend to launch an economic terrorist attack on us, but we also have our own tools and know how to play the game. Our defense is no longer so defensive; the enemies should wait for an attack.”
Renewed geopolitical tensions have fuelled inflation concerns while also pushing U.S. Treasury yields higher in recent sessions, supporting the Greenback and weighing on non-yielding bullion.
However, downside risks for gold could remain limited by reduced expectations of a U.S. Federal Reserve (Fed) interest rate hike in September, as well as strong physical demand from India and China.
