Gold prices rose 1.30% in European trading, reaching $5,154. This rebound followed a nearly 5% drop in the previous session. Investors sought gold as a safe haven amid escalating U.S.-Iran tensions.
A stronger U.S. dollar, however, limited further gains for gold. The dollar climbed 0.7% overnight to a six-week high. This happened as traders grew more nervous and reduced expectations for aggressive Federal Reserve rate cuts.
The worsening Middle East situation boosted gold’s appeal. U.S. strikes on Iranian targets drew serious threats from Tehran. Concerns about energy supply disruptions near key shipping routes also pushed oil prices higher, making investors wary of inflation.
Gold is currently trading around $5,159. It faces resistance near $5,193, a former support level. A move below $5,193 could see prices test $5,078 or $4,995.
Silver traded at $84.81, recovering from a sharp fall from $96.20. Strong buying appeared at the $79.16 support level. Silver must break past resistance around $85.45 for further upward movement.