Gold price edged lower on Monday (June 23) despite rising geopolitical tensions in West Asia following U.S. airstrikes on Iranian nuclear facilities. Instead of flocking to gold, investors turned to the U.S. dollar, which absorbed most of the safe-haven demand and weighed on the precious metal.
As of 03:41 GMT, spot gold was down 0.2% at $3,362.29 per ounce, while U.S. gold futures slipped to $3,378 an ounce.
“The U.S. strikes on Iranian nuclear facilities resulted in safe-haven flows into the dollar,” said Tim Waterer, Chief Market Analyst at KCM Trade. “This uptick in the dollar pegged gold back, leading to a subdued performance despite the geopolitical risk.”
Indian Gold Rates Remain Resilient
In India, gold prices held firm despite the global pullback. According to Goodreturns, the 24-karat gold price stood at ₹1,00,690 per 10 grams, while 22-karat gold was priced at ₹92,300, and 18-karat gold at ₹75,520.
Geopolitical Tensions Escalate
The U.S. launched bunker-buster strikes on Iran’s Fordow nuclear site, escalating hostilities between Washington, Tehran, and Tel Aviv. Iran vowed retaliation, while Israel confirmed strikes on western Iranian targets.
Further unsettling the region, President Donald Trump floated the possibility of regime change in Iran, although global markets remained relatively calm, with Asian shares slipping and oil prices briefly hitting five-month highs.
Safe-Haven Demand Shifts to Dollar
While gold typically rallies in times of crisis, this time, the U.S. dollar drew the bulk of safe-haven inflows, limiting gold’s upside.
“Gold saw an initial spike post the U.S. strikes but couldn’t hold those gains, suggesting the rally may have peaked for now,” said Aksha Kamboj, Vice President of the India Bullion and Jewellers Association and Chairperson of Aspect Global Ventures.
She added that the yellow metal may be waiting for a stronger response from Iran before resuming its upward trend. Rising oil prices, sticky inflation, and reduced expectations of U.S. interest rate cuts are also steering investors toward the dollar.
Outlook: Key Events to Watch
Market attention now shifts to two major catalysts:
- Fed Chair Jerome Powell is set to testify before Congress, offering insights into the central bank’s stance on inflation and rate policy.
- U.S. PCE inflation data, a key gauge for Fed policy, is also due this week.
On the technical side, Reuters analyst Wang Tao noted that spot gold could retest support at $3,348 per ounce. A decisive break below could send prices down to $3,324.
