Gold prices rebounded on Tuesday, supported by a weaker United States Dollar as the Japanese Yen extended its rally and investors weighed geopolitical risks surrounding the Iran conflict.
By 3:35 pm AEST (5:35 am GMT), spot gold was 0.4% higher at US$4,422.82 an ounce.
The Japanese Yen extended its rally to a seven-month high against the U.S. dollar after stronger wage growth data and an upward revision to Japan’s second-quarter GDP boosted expectations for a faster pace of Bank of Japan tightening.
The hawkish repricing of BoJ policy continued to weigh on the USD/JPY pair and the broader U.S. dollar, providing support for gold.
However, the precious metal’s recovery could face resistance as oil prices remain elevated at seven-week highs, keeping inflation concerns and expectations for a Federal Reserve rate hike alive.
Iranian Parliament Speaker Mohammad Bagher Ghalibaf also warned after the U.S. and Iran exchanged strikes on shipping over the weekend, "strike our assets, and you get struck".
