Gold Price Falters on US Dollar Recovery Amid US-Iran Tensions

The gold price has attempted a minor recovery to around $4,050 in Asian trading on Tuesday, halting its two-day decline amidst ongoing tensions between the US and Iran.

However, investors appear to lack conviction in this uptick, as the US Dollar (USD) continues to recover from its weekly troughs, limiting the appeal of gold.

The renewed tensions with Iran have kept markets on high alert, with President Donald Trump warning that this was Tehran's 'last chance' to reach a favorable agreement and bring the five-month-old war to an end. However, Iran has swiftly dismissed the claim, stating no negotiations were underway or planned.

US labour data will be in focus later this week, including Friday's Nonfarm Payrolls (NFP) report, which could provide fresh clues on the Federal Reserve's interest rate trajectory amid persisting concerns over elevated inflation. Markets continue pricing in a 65% chance that the Fed will raise rates in September.