Gold Prices Rise Amid Geopolitical Tensions, Shrug Off Dollar Strength

Alanbatnews -

Gold prices edged higher on Tuesday, buoyed by safe-haven demand as geopolitical tensions escalated, overshadowing the impact of a strong dollar.

Spot gold rose 0.7% to $5,362.90 per ounce. U.S. gold futures for April delivery climbed 1.2% to $5,376.50.

The precious metal's ascent comes as investors seek refuge from escalating conflict and uncertainty. Concerns are mounting that the aerial conflict could morph into a protracted regional war, further deepening market unease.

Adding to the apprehension, Iranian media reported a high-ranking official in the Islamic Revolutionary Guard Corps warning of a potential closure of the Strait of Hormuz. The official threatened to target any vessel attempting to traverse the strategic waterway.

This marks the most explicit warning since reports surfaced on Saturday about the potential disruption to exports, a move that threatens to choke off a substantial portion of global oil flows and drive crude prices sharply higher.

“The scope and duration of the conflict remain largely unclear, and against this backdrop, gold is capturing the lion’s share of safe-haven demand,” said Tim Waterer, chief market analyst at KCM Trade.

The dollar remained near its highest level in over five weeks, underpinned by robust demand and market caution. While a stronger dollar typically makes dollar-denominated assets like gold more expensive for holders of other currencies, this inverse relationship is not absolute. In times of heightened uncertainty, investors often flock to both the dollar and gold as safe havens.

“Gold would likely be trading at even higher levels were it not for the strength of the dollar since the conflict escalated,” Waterer added. “Inflation concerns are front and center for traders right now, given the trajectory of oil prices and reduced shipping volumes through the Strait of Hormuz.”

Elsewhere, spot silver edged up 0.2% to $89.64 per ounce. Platinum gained 0.3% to $2,297.05 per ounce, and palladium rose 1% to $1,784.81.