Persistent geopolitical tensions and hawkish central bank expectations pressure gold prices near a key psychological level.
Gold (XAU/USD) trades near $4,500 in early European trading, pressured by a stronger US Dollar (USD) and rising expectations of prolonged higher interest rates. Geopolitical risks, including US strikes on Iranian targets, support the greenback’s safe-haven appeal, offsetting gold’s traditional role as a hedge.
Markets anticipate further monetary tightening from major central banks, including the Federal Reserve, amid inflation concerns fueled by supply disruptions in the Middle East. The Reserve Bank of Australia’s recent rate hike underscores the global shift toward tighter policy, further dampening non-yielding assets like gold.
The US-Iran standoff and potential supply chain bottlenecks in the Strait of Hormuz continue to stoke inflation fears, reinforcing hawkish central bank rhetoric. This dynamic keeps gold bulls sidelined despite ongoing geopolitical uncertainty.