Gold Weakens as Dollar Strengthens, Safe Havens Still Sought Amid Iran Conflict
Gold prices fell on Tuesday (February 3rd) as a sharp strengthening US dollar pressured the precious metal, while investors continued to assess the escalating conflict in the Middle East and concerns about oil supply disruptions.
Spot gold weakened 3.7% to $5,122.07 per ounce, after rising by around 1% to $5,380.08 per ounce earlier in the session. Meanwhile, US gold futures traded 3.3% lower at $5,132.80 per ounce. In the previous session, gold had gained around 1%.
Sentiment-wise, the escalating Middle East conflict maintained interest in safe haven assets. Gold—often sought after during times of heightened geopolitical uncertainty—remained supported after a weekend marked by major military action in the region.
However, the same developments also strengthened the US dollar, limiting gold's upside. A stronger dollar makes gold more expensive for buyers outside the US, while also triggering limited profit-taking after the previous rally.
Reports indicate that US and Israeli forces launched a large-scale attack on Iran that killed Supreme Leader Ayatollah Ali Khamenei and several senior commanders. Iran then retaliated with a barrage of missile attacks across the region.
The conflict has also reportedly spread beyond Iran, including an Israeli attack on Lebanon following an attack by Hezbollah, as well as a reported incident in Kuwait where local air defenses mistakenly shot down a US jet.
US President Donald Trump said the operation could continue for weeks, acknowledging uncertainty within the Iranian leadership following Khamenei's death—a signal that the risk of regional instability could persist and continue to support safe-haven demand, even as gold's movement remains "restrained" by the strength of the dollar.
Source: Newsmaker.id
