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Gold rebounds above $4,100 as US-Iran tensions weigh on risk
Gold was around $4,120 early Friday in Asia, as traders priced in possible Middle East escalation that could push oil higher and keep inflation fears alive.
Gold prices rebounded above $4,100, reaching roughly $4,120 in the early Asian session on Friday, as traders assessed the risk of a renewed US-Iran conflict. FXStreet said the move came as uncertainty rose following the White House’s continued commitment to a memorandum of understanding with Iran, despite President Donald Trump’s earlier comments that a framework deal to end the Iran war was “over.”
Trump warned that any further Iranian attacks in the Strait of Hormuz would lead to strikes that “get much worse,” according to the outlet. The report also cited that on Thursday, Iran targeted US bases in Bahrain, Kuwait and Qatar, and that Jordan intercepted eight Iran-launched missiles, per Axios.
FXStreet linked the gold uptick to broader market concerns, noting that higher oil prices from escalation could stoke inflation fears and reinforce a higher-for-longer approach from the Federal Reserve. It also pointed to minutes from the Fed’s June meeting as reflecting a divided central bank, given uncertainty about how to proceed on rates without more information on inflation.
The outlet added context on why gold can benefit in turbulent periods, describing it as a safe-haven asset and an inflation hedge. It said central banks are among the largest holders and cited World Gold Council data that central banks added 1,136 tonnes of gold worth about $70 billion to their reserves in 2022, the highest yearly purchase since records began.
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