Gold prices stabilized after briefly falling below key levels during Asian trading on Monday as markets focused on developments related to the conflict between United States and Israel on one side and Iran on the other.
Caution ahead of Federal Reserve meeting this week also weighed on gold as markets fear a more hawkish tone from central bank amid persistent inflation pressures.
Spot gold stabilized around $5016 per ounce while gold futures declined by about 0.8 percent. Spot prices had briefly dropped below $5000 per ounce earlier in session.
Conflict with Iran continues without clear signs of de escalation after United States and Israel launched an attack on a major export terminal over weekend which triggered strong reactions from Tehran.
Oil prices remained above $100 per barrel although they eased slightly after comments from US President Donald Trump who said discussions are ongoing to form coalition aimed at reopening major shipping route that Iran had blocked. Trump also suggested war with Iran could be nearing an end although Tehran has repeatedly rejected such claims.
Despite geopolitical tensions gold performance has been relatively weak since conflict began as concerns over higher interest rates for longer driven by inflation pressures related to war have overshadowed safe haven demand.
Analysts noted that gold faces pressure from strong US dollar rising bond yields and uncertainty surrounding Federal Reserve policy in addition to liquidation of positions by some traders to meet margin requirements which has contributed to weakness in bullion prices.
However analysts still believe safe haven case for gold amid geopolitical tensions remains intact as prices have gained around 16 percent since start of 2026.
In other metals markets silver declined by about 0.3 percent while platinum rose roughly 1.8 percent supported by broader moves in currency markets.
Focus this week shifts to Federal Reserve meeting where markets widely expect interest rates to remain unchanged.
Expectations come amid growing uncertainty surrounding US economy particularly with concerns that rising energy prices linked to conflict with Iran could fuel inflation.
Independence of Federal Reserve also received some support recently after US judge blocked subpoenas issued by Justice Department against Fed Chair Jerome Powell over alleged cost overruns.
Powell argued subpoenas were attempt to pressure central bank into cutting interest rates before court ruled in his favor. Case had raised concerns about Federal Reserve independence while Justice Department said it plans to appeal ruling which could push case toward Supreme Court.
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