XAU/USD rebounds sharply after retreating to $4,000 as geopolitical risks drive demand for the precious metal.
Gold prices surged to $4,080 in early Asian trading Wednesday, recovering from a dip below the $4,000 mark in the prior session. The rally follows heightened safe-haven demand amid escalating military tensions between the US and Iran, which have injected volatility into commodity markets.
Analysts noted the move appeared driven by dip-buying rather than fresh headlines, as the macroeconomic backdrop remains largely unchanged. US Central Command conducted its 11th consecutive night of strikes on Iran, while Tehran’s forces targeted US military assets across the Middle East.
Markets are monitoring the conflict for potential inflationary pressures from higher energy costs, which could influence Federal Reserve policy. Swap traders currently see low odds of a July rate hike but have priced in at least one increase by year-end.