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Gold prices fell on Friday as the US Dollar strengthened and US Treasury yields rose, offsetting earlier gains. The non-yielding precious metal faced pressure from a broadly higher USD, which reduced its appeal as an alternative investment. Despite heightened geopolitical tensions between the US and Iran, which typically boost safe-haven demand, the dollar's resilience overshadowed these factors. The 10-year US Treasury yield climbed to 4.25%, making dollar-denominated assets more attractive compared to gold. The decline in gold highlights the ongoing tug-of-war between geopolitical risks and monetary policy dynamics. While conflicts like the US-Iran standoff usually drive investors toward gold, the Federal Reserve's hawkish stance and rising yields have shifted capital flows toward higher-yielding dollar assets. This dynamic has weakened gold's traditional safe-haven status, as investors prioritize returns over pure risk mitigation. For traders, the key focus remains on the Fed's next rate decision and inflation data, which could determine the dollar's trajectory. Gold's technical support at $2,300 per ounce will be critical to watch. Meanwhile, the interplay between geopolitical events and monetary policy will continue to shape market sentiment, with potential volatility expected in both gold and the broader commodity sector.
