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Gold prices (XAU/USD) initially faced heavy selling pressure at the start of the week but later recovered slightly as the US Dollar (USD) and Treasury yields retreated from recent peaks. The partial rebound came amid shifting macroeconomic and geopolitical dynamics, including uncertainty over the Fed’s rate policy and escalating tensions between the US and Iran. While the dollar’s weakness and lower yields provided temporary support for gold’s appeal as a safe-haven asset, the broader bearish sentiment from geopolitical risks and potential Fed rate hikes continues to weigh on the market. The situation highlights the dual influence of central bank policy and global security concerns on precious metals. Traders are closely monitoring the Fed’s upcoming statements for clues about the trajectory of interest rates, which directly impact gold’s competitiveness against the dollar. Meanwhile, any escalation in US-Iran tensions could trigger a flight to safety, temporarily boosting gold demand. However, sustained volatility may deter long-term investment in the asset. For Gulf and MENA investors, the interplay between dollar strength and geopolitical instability presents both risks and opportunities. A stronger dollar typically undermines gold’s appeal, but heightened regional tensions could drive demand for hedging purposes. Key watchpoints include the Fed’s policy stance, developments in the US-Iran standoff, and shifts in global risk appetite. These factors will likely dictate whether gold can stabilize or face further downward pressure in the near term.
