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Gold prices edged higher by 0.30% on Monday as tensions between the US and Iran escalated after President Donald Trump dismissed Tehran’s proposed deal. The XAU/USD pair rose to $4,726, finding support after a daily low. Trump’s rejection of the agreement, which he called 'totally unacceptable,' has heightened fears of renewed military conflict in the region. Analysts note that geopolitical risks often drive safe-haven assets like gold, as investors seek protection against uncertainty.
The market reaction underscores the sensitivity of gold to geopolitical developments. With the US and Iran at an impasse, traders are closely monitoring any signs of further escalation or diplomatic breakthroughs. Central banks and institutional investors may increase gold allocations amid rising volatility, potentially supporting the metal’s price trajectory. However, technical indicators suggest limited upside momentum for now.
For Gulf investors, the situation highlights the interconnectedness of global politics and commodity markets. The Middle East’s strategic importance means regional tensions could disrupt oil flows and impact broader commodity prices. Traders should watch for updates on Iran’s nuclear program, US sanctions, and any military movements in the Persian Gulf. Gold’s role as a hedge against geopolitical risk remains critical in this environment.
