Gold traded steady and tended to weaken on Monday (June 8) after Iran launched several missiles at Israel, sparking concerns that efforts to end the Middle East war were once again threatened. Bullion hovered around US$4,335/oz, after plunging nearly 5% last week and losing momentum.
Sunday’s latest attack followed the worst escalation since the ceasefire was agreed in early April. US President Donald Trump said he still wanted a negotiated solution with Tehran, but the market remained defensive as the diplomatic path was seen as fragile and susceptible to military developments on the ground.
The conflict, now in its fourth month, continues to disrupt energy flows through the Strait of Hormuz. High oil prices have fueled concerns about global inflation, leading the market to believe central banks are likely to keep interest rates high for longer or even raise them if price pressures persist. This environment is typically a burden on gold because it offers no yield.
Pressure on gold also stems from the US macro environment. On Friday, gold erased its year-to-date gains after strong US jobs data pushed the dollar and bond yields higher, fueling speculation that the Fed could tighten policy again in 2026. A stronger dollar makes gold more expensive for non-USD buyers, thus curbing buying interest.
On the other hand, there were supporting factors that limited the decline. The market believes some players could return as bargain hunters after last week’s sharp decline, although the short-term bias remains tilted to the downside. Analysts also noted that many core issues of the conflict remain unresolved, so headline volatility remains high.
Structural demand also remains evident from central banks. Traders view continued gold purchases by the People’s Bank of China—which added around 10 tons last month and extended the buying trend—as a psychological buffer, although its impact is not immediately offsetting pressure from the dollar and interest rates. In Asian trading, gold edged up to US$4,337.91, while the Bloomberg Dollar Index edged higher after rising strongly last week. (asd)*
Source: Newsmaker.id