Gold News: Middle East Tensions Overpower Dollar Strength, Lifting Gold Prices

Gold Edges Higher as Middle East Tensions Offset Dollar Strength

Gold prices climbed modestly Monday, reversing earlier losses as geopolitical risks in the Middle East overpowered pressure from a firmer U.S. dollar. The metal bounced off its 50-day moving average at $3,321.30—a level watched closely by institutional players—suggesting dip-buying activity is underway.

At 16:20 GMT, XAU/USD is trading $3387.41, up $18.66 or +0.55%.

The market is seeing accumulation on pullbacks, with professionals positioning around key technical levels. The inability to break below the pivot at $3,310.48 may have triggered short-covering, lifting gold intraday. However, bullish momentum remains capped unless gold can decisively take out resistance at $3,451.53. Until then, the metal may consolidate within a broader range.

Can Gold Stay Resilient as the Federal Reserve Turns Dovish?

Investors continue to weigh Federal Reserve policy signals. The Fed held rates steady last week, but Vice Chair Michelle Bowman’s dovish comments on Monday—citing labor market concerns and downplaying inflation risks—suggest easing could come sooner than previously signaled. This undermines dollar strength, which had seen a brief rally earlier in the day.

Chair Jerome Powell’s upcoming testimony is now in focus. Any softening in his rhetoric could further weaken the dollar, lending support to gold. However, safe-haven buying is already being tested as recent gains in gold occurred despite the U.S. Dollar Index (DXY) rising 0.5% Monday.

Oil, OPEC, and the Strait of Hormuz—Geopolitical Risks Lend Gold a Floor

Heightened tensions in the Middle East have added a risk premium to gold. Israel’s airstrikes on Tehran, including a symbolic hit on Evin prison, mark a significant escalation. Iran’s threats to retaliate—and potentially disrupt oil flow through the Strait of Hormuz—have stirred global markets.

Initial fears pushed oil and the dollar higher, but both later retraced. The DXY reversed after stalling at the 50-day moving average of 99.500, leaving it vulnerable to a drop toward 98.521 unless a new catalyst emerges.

Gold Prices Forecast: Bullish Bias Holds Above $3,310.48

Technical and geopolitical factors are aligning to keep a bullish floor under gold in the near term. The $3,310.48–$3,321.30 zone remains a critical support area, and continued tensions in the Middle East are likely to sustain demand for safety assets. While upside may be capped until $3,451.53 is cleared, dovish Fed commentary and any dollar retracement could create room for further upside.

Outlook: Mildly bullish while above $3,310.48, with potential acceleration toward $3,451.53 and beyond if resistance breaks.

More Information in our Economic Calendar.