Gold slipped toward $4,436 on Tuesday as the US-Iran conflict entered its 193rd day and Brent crude pushed above $97 a barrel. A weaker dollar and a rallying Japanese yen offered some support, but escalating strikes across the Gulf kept pressure on the metal.
Gold futures traded near the previous session's lows on Tuesday, with the US-Iran conflict now in its 193rd day. Oil extended its climb as investors weighed the risk of further disruption to Middle East energy supplies.
Oil Surges as Gulf Tensions Escalate
Brent crude rose 1.74% to $98.69 a barrel, extending gains after a weekend of tit-for-tat strikes between the United States and Iran that included attacks on shipping. WTI crude climbed 2.66% to $94.15 over the same stretch. Brent has gained 8% over the past week. WTI rose nearly 10% over the same period.
Iranian officials warned that U.S. oil and gas infrastructure across the Gulf remains exposed to retaliation. According to Investing.com: "Strike our assets, and you get struck. We've already proven it," said Iranian Parliament Speaker Mohammad Baqer Qalibaf. Houthi militants also launched attacks on Saudi Arabia on Tuesday, injuring 73 people, raising concern the conflict could spread to Gulf states hosting U.S. forces.
Yen Rally Offsets Some Pressure
The Japanese yen extended its rally against the dollar, approaching its strongest level of the year. Traders bet the Bank of Japan will raise interest rates. A weaker dollar makes dollar-priced bullion cheaper for buyers using other currencies, and gold has found support from the currency move even as stagflation fears weigh on the wider backdrop.
Gold has traded mostly around the $4,400 level since falling sharply last week. The metal has held a narrow range since rebounding from a floor near $4,000 in July.
Technical Levels Point Lower
On the daily chart, gold opened at $4,469 and tested a high of $4,488.54 before falling to $4,436, below its $4,444 support. The metal looks set to test the next support at $4,399.16. A breakdown there could push it toward the 100 EMA at $4,378. That level already trades below the 200 EMA at $4,554.96.
Source: Investing.com
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