Gold Prices Plummet Amid Stronger Dollar and Rising Yields

Gold prices have been slipping despite recent US-Iran strikes, with spot gold trading around $4,300 in Asian hours. This marks a fourth consecutive session of decline for the precious metal, which has broken below its 200-day moving average and lost key support levels.

The move is largely attributed to a stronger dollar, rising Treasury yields, and increased oil prices. The US-Iran conflict has pushed Brent crude above $95 per barrel, while the 10-year Treasury yield has approached 4.8%, reinforcing expectations of another rate hike by the Federal Reserve this month.

According to ANZ Research, gold is being weighed down by the combination of Middle East tensions, a stronger dollar, and rising yields. The firm notes that higher energy costs strengthen the case for tighter monetary policy, offsetting some of the haven demand that would normally benefit bullion.

The market's response to the US-Iran conflict is unusual, as it has lifted crude prices and inflation expectations, pushing bond yields higher. Analysts warn that a sustained break below $4,329-$4,311 could expose $4,216 and $4,203, while recovering levels around $4,450-$4,532 would be needed to repair the near-term structure.

The next catalyst for gold prices is expected to be the US labor market. The ADP employment report is due Wednesday, followed by the more important August nonfarm-payrolls report on Friday. Economists expect payroll growth to remain subdued after July's surprise contraction.