Gold prices dipped to weekly lows early Monday as markets reacted to the United States airstrikes on three of Iran’s major nuclear sites.
By 3:50 pm AEST (5:50 am GMT) spot gold was down $12.46 or 0.4% to US$3,356.21 per ounce.
U.S. President Donald Trump confirmed the strikes on Fordo, Natanz, and Isfahan, escalating the Israel-Iran conflict and sparking fears of a broader regional war should Iran retaliate by attempting to close the oil-critical Strait of Hormuz.
ANZ analysts noted expectations for prices to rally sharply amid the escalating conflict: "The precious metal has been a relatively good hedge against uncertainty triggered by major geopolitical events. This Middle East conflict threatens to be one of the biggest issues facing the world in recent memory.
"The flight to safety by investors should see safe haven buying pick up.”
However, early trade saw a risk-off rally in the U.S. dollar, which weighed on bullion. Focus now turns to the release of S&P Global’s preliminary PMI data for the U.S. and Eurozone, key indicators of global economic health.
Weak prints could stoke fears of slower growth, potentially reviving demand for gold as a safe haven.
Meanwhile, investor attention is also fixed on upcoming comments from several U.S. Federal Reserve officials, following last week’s pause.
