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Gold prices fell to $4,803, a 0.70% decline, as heightened US-Iran tensions over the weekend reduced safe-haven demand and pushed investors toward riskier assets. The US Treasury yields remained stable, while a surge in oil prices further pressured gold, which typically inverses with energy costs. This week's decline reflects a shift in market sentiment toward risk-on assets amid geopolitical uncertainty.
The move highlights gold's sensitivity to both geopolitical risks and the cost of energy. As oil prices rise, the opportunity cost of holding gold increases, making equities and commodities more attractive. Additionally, steady US yields limit gold's appeal as an inflation hedge. Traders are now monitoring whether the US-Iran standoff will escalate or de-escalate, which could reverse this trend.
For Gulf investors, the interplay between oil and gold is critical. A prolonged rise in oil prices could weaken gold's performance, while renewed tensions might trigger a safe-haven rebound. Key watchpoints include central bank policy responses and potential sanctions on Iran. The US Dollar's strength against the euro and yen will also influence gold's trajectory.
