Gold Price Slumps Amid Rising Oil Prices and US-Iran Tensions
The price of gold has declined as rising oil prices and US-Iran tensions have bolstered the value of the US dollar. The two-day uptrend in gold's price was halted, with some sellers emerging following a modest Asian session increase on Tuesday.
The US dollar gained overnight, reaching its highest point since August, driven by inflation risks stemming from higher crude oil prices and the prospect of at least one interest rate hike by the Federal Reserve (Fed) in 2026. The ongoing tensions between the US and Iran have also contributed to the safe-haven status of the US dollar.
US President Donald Trump stated that Iran should surrender to end a nearly six-month-long war, adding that the US is not seeking an extension of the Memorandum of Understanding (MoU) with Iran. The escalating campaign by the Iran-backed Houthi rebels in Yemen has further disrupted commercial shipping traffic through the Bab al-Mandeb Strait.
The technical analysis suggests that gold continues to struggle to find acceptance above its 50% retracement level, while momentum indicators remain constructive.