Gold prices (XAU/USD) climbed to nearly $3,375 during Monday’s early Asian session, driven higher by the sharp escalation in the Middle East following US President Donald Trump’s decision to join Israel’s conflict against Iran. Market participants now await the preliminary US S&P Global Purchasing Managers Index (PMI) for June, scheduled later Monday, which could influence near-term price action.
On Sunday, the US launched airstrikes targeting three Iranian nuclear facilities, directly entering the conflict between Israel and Iran despite previous promises from Trump to avoid new foreign wars. The heightened tensions have increased demand for safe-haven assets like gold, traditionally viewed as a hedge during periods of political and economic uncertainty.
Meanwhile, Federal Reserve Governor Christopher Waller signaled on Friday that the Fed may be ready to cut interest rates as early as July. Such dovish remarks could weigh on the US dollar, providing additional support to gold, which is priced in USD and tends to benefit from a weaker dollar as it becomes cheaper for foreign buyers.
Investors are now closely watching the upcoming US S&P Global PMI data for June. Any stronger-than-expected reading could strengthen the US dollar and limit gold’s upside potential.
