Spot gold prices stabilized around $4,010 an ounce on Monday, showing resilience despite a volatile weekend marked by intensified military clashes between the United States and Iran.
The precious metal traded roughly 0.3% lower at $4,006.02 in Singapore afternoon trading, reflecting a market caught between competing macroeconomic and geopolitical forces.
The stability in bullion comes as traders reassess the Federal Reserve’s policy trajectory.
While the escalation in the Middle East typically drives safe-haven demand, investors are simultaneously weighing the likelihood of the central bank raising interest rates to combat inflationary pressures stemming from the conflict.
This dual dynamic has created a standoff in the market, preventing a sharp breakout in either direction.
Recent US economic data had indicated easing inflationary pressures, which generally weakens the case for holding non-yielding assets like gold.