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Gold trades near $4,010 as Middle East headlines swing sentiment

XAU/USD jumped to about $4,040 earlier in the session before a reported Yemen-linked naval blockade pushed the US dollar higher and capped gold gains.

Reported · Written up by our desk · Precious Metals

Gold (XAU/USD) traded in a volatile range on Monday as conflicting Middle East headlines drove rapid shifts in risk sentiment. The metal was around $4,010 at the time of writing after rising to an intraday high near $4,040, then giving back momentum.

FXStreet reported that gold climbed earlier after Iran and the United States signaled that diplomacy was still possible. Comments attributed to Iran’s Foreign Ministry and US Secretary of State Marco Rubio pushed the US dollar and oil prices lower, supporting gold.

The upside faded after Reuters reported Yemen’s Iran-aligned Houthis declared an immediate naval blockade against Saudi Arabia. Following that development, the US dollar recovered its earlier losses and oil rebounded from intraday lows toward a one-month high, limiting gold’s gains.

FXStreet added that hawkish Federal Reserve expectations remain a headwind for the non-yielding metal, with markets expecting at least one interest rate hike this year. Traders are also watching Initial Jobless Claims due Thursday and preliminary July PMI data scheduled for Friday, while geopolitical headlines are expected to stay the main near-term driver.

Latest closeGold $3,981.40 ▼1.6%

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