Gold prices hovered around just above the key US$5,000 level during Monday’s Asian trading session as investors monitored developments in the escalating conflict in the Middle East and reassessed the outlook for the United States dollar.
The precious metal briefly dropped to monthly lows around $4,970 before recovering to trade back above the psychologically important $5,000 mark.
By 4:10 pm AEDT (5:10 am GMT), spot gold was trading 0.1% lower at $5,012.31 per ounce.
Market sentiment around gold remains mixed, with traders caught between competing geopolitical developments. Hopes that shipping through the Strait of Hormuz could soon resume have supported the U.S. dollar and weighed on the metal, while persistent risks of further escalation in the conflict between the United States and Iran continue to underpin safe-haven demand.
Gold is currently testing support near its 50-day simple moving average as the market navigates a delicate balance between bullish and bearish drivers.
A report by the Wall Street Journal late Sunday suggested that the White House is preparing to announce a multinational coalition aimed at escorting ships through the Strait of Hormuz, following calls from U.S. President Donald Trump for allied nations to help secure the vital shipping corridor.
Trump has also warned that NATO faces a “very bad” future if allies fail to assist in reopening the Strait, according to reporting from the Financial Times.
At the same time, the geopolitical situation remains highly uncertain. The Trump administration is also considering the possibility of seizing Iran’s Kharg Island oil export hub, a move that would likely require the deployment of US ground forces.
The mixed flow of headlines has prevented the U.S. dollar from extending its recent gains, leaving gold prices trading within a relatively narrow range.
