Gold slips as investors flock to the Dollar after US strike on Iranian nuclear sites

At the start of a tension-filled week, gold entered a phase of mild correction after weeks of steady gains driven by escalating geopolitical risks between Iran and Israel. However, the dynamics changed dramatically as the U.S. carried out a direct military strike, shifting the market’s risk compass—at least temporarily—back toward the traditional safe haven: the U.S. dollar.

Following a targeted U.S. strike on several Iranian nuclear facilities over the weekend, the dollar regained its dominance as a classic crisis hedge, drawing inflows at the expense of gold. The yellow metal slipped 0.2% during early Asian trading on Monday, settling near $3,355 per ounce, as market sentiment recalibrated.

US escalation marks a new turning point in the conflict

This wasn’t a typical back-and-forth between Iran and Israel. The latest escalation featured a direct U.S. intervention, with precision strikes reportedly hitting three key Iranian nuclear facilities suspected to be part of Tehran’s vital infrastructure.

President Donald Trump claimed that the operation had “effectively halted Iran’s nuclear ambitions,” citing growing intelligence concerns over the acceleration of Iran’s program. Iran, on the other hand, denounced the strike as a “declaration of war” and vowed a “harsh and painful” response, fueling fears of a broader regional conflict.

Gold pulls back – Not due to fading appeal, But Dollar strength

At first glance, gold’s slight retreat may seem paradoxical in the face of rising geopolitical tension. But the reality is more nuanced. While gold remains a trusted haven, the dollar's status as a sovereign-backed, liquid asset makes it the go-to in moments of immediate geopolitical shock.

The U.S. Dollar Index rose by more than 0.3%, benefiting from safe-haven flows. Meanwhile, concerns over a potential closure of the Strait of Hormuz—a key artery for global oil supply—pushed crude prices sharply higher. That, in turn, reignited inflationary fears, prompting some traders to bet that the Federal Reserve may hold rates higher for longer, which pressured gold further.

All eyes on Powell's testimony this week

Markets are now turning to a critical risk event: Fed Chair Jerome Powell’s testimony before the U.S. Congress on Tuesday. Investors will be parsing his words for clues—will the Fed maintain its cautious tone on interest rates, or signal more flexibility amid mounting geopolitical stress and mixed economic data?

Recent U.S. retail sales figures disappointed, rekindling speculation of a potential rate cut later this year, especially with growing political and electoral pressures building ahead of the November election.

Silver steady, Copper reflects industrial anxiety

While gold dipped slightly, silver held steady at around $36.05 per ounce, maintaining strength after a series of recent rallies. Platinum, however, pulled back to $1,263, as traders locked in profits following a strong multi-year high.

In industrial metals, London copper futures fell to $9,643 per ton, reflecting concerns over supply chain disruptions and weakening demand if geopolitical tensions broaden into global trade routes.

Technical outlook: Has Gold’s uptrend peaked?

From a technical perspective, gold remains within a rising channel that began in April. Critical support lies between $3,335 and $3,310—a decisive breakdown below this zone could invalidate the bullish setup and trigger a deeper correction toward $3,280.

On the upside, reclaiming $3,400 and breaking above $3,434 would likely restore bullish momentum and put the all-time high at $3,500 back into play, especially if geopolitical risks persist and U.S. data weakens.

Strategic takeaway for investors

• Don’t be alarmed by gold’s pullback—it appears to be a healthy correction within a broader uptrend.
• The Middle East remains on a knife’s edge, and the conflict could easily escalate into a multi-front confrontation.
• The dollar is benefiting temporarily from panic flows, but any dovish hint from Powell could swing the sentiment back in favor of gold.
• Avoid chasing strength. Look for buying opportunities near technical support.
• In times like these, market success is not about boldness—it’s about discipline. Gold remains a resilient safe haven, but timing is everything.