Gold falls to near $5,100 as inflation fears weigh amidst Middle East conflict
- Gold tumbles to around $5,100 in Wednesday’s early Asian session.
- Inflation concerns intensified amid fears of a potentially prolonged Middle East conflict.
- Persistent geopolitical risks might help limit the Gold’s losses.
Gold price (XAU/USD) faces some selling pressure near $5,100 during the early Asian session on Wednesday. The precious metal falls amid a renewed US Dollar (USD) demand and dimming prospects for US rate cuts. The US ISM Services Purchasing Managers Index (PMI) report will be published later on Wednesday.
Inflation concerns are resurfacing as oil prices rise, leading markets to reduce the likelihood of a Federal Reserve (Fed) interest rate cut. The Greenback climbed to a three-month high, making USD-denominated gold more expensive for international buyers. Markets largely expect the US central bank to leave the interest rate unchanged until the summer, though US President Donald Trump has pushed for lower rates.
“The move lower in gold appears to be driven by a flight to liquidity - a flight to cash. We have a strong dollar and bond yields trading higher,” said Bob Haberkorn, senior market strategist at RJO Futures.
Nonetheless, the potential downside for the yellow metal might be short-lived, and flight to safety flows are driven by geopolitical risk. US Secretary of State Marco Rubio said all personnel are accounted for after a drone hit the grounds of the US consulate in Dubai, per CNN. The US earlier closed embassies in Saudi Arabia, Kuwait, and Lebanon and warned Americans to leave some countries in the region. Meanwhile, the Israeli army conducts a fresh land invasion into Lebanon's south to destroy Hezbollah and escalates airstrikes on the country.
Related Articles
Trump’s ‘At All Costs’ Rhetoric Shorts Global Assets? Gold and Silver Not Spared
TradingKey - Amid intensifying geopolitical tensions, investors once bet on risk premiums in precious metals and safe-haven assets. On February 28, 2026, the United States and Israel launched localized air strikes against Iran. The strikes resulted in the death of Iran’s Supreme Leader and triggered multi-directional retaliatory actions across the region. Subsequently, Trump declared that strikes against Iran would be pursued "at all costs."
US-Iran Conflict Escalates: Why Did US Stocks Rise While Treasuries Plunged? Goldman Sachs Points to "Hidden Factors"
TradingKey - Despite the widening conflict in the Middle East and consecutive attacks on U.S. diplomatic facilities, the U.S. stock market’s reaction has remained unusually calm. On Monday, March 2 (ET), the three major U.S. stock indices opened lower but subsequently rebounded. By the close, the Na
Partnering With Lumentum and Coherent, Can Nvidia’s $4 Billion CPO Bet Support the Future of AI Computing Power?
TradingKey - On Monday, March 2 local time, NVIDIA (NVDA) announced that it has entered into a deep strategic partnership with optical technology manufacturers Lumentum (LITE) and Coherent (COHR). NVIDIA will invest $2 billion in each company, totaling a massive $4 billion investment. This move advances NVIDIA's strategic layout in the field of AI data center network architecture to a new stage.
JPMorgan Warns Hormuz Blockade Risks Oil Shutdown in 25 Days, But How Will the US-Iran Conflict Shape Global Oil Prices?
TradingKey - Following the announcement on the night of February 28 banning all vessels from passing through the Strait of Hormuz, JPMorgan Chase issued a warning: if the Strait of Hormuz is completely blocked, the combined onshore and offshore storage capacity of Middle Eastern oil-producing nation
US-Iran Conflict Ignites, Global Arms Race Heats Up, Will Defense Stocks See a New Round of Gains?
TradingKey - On February 28 local time, the United States and Israel launched joint large-scale airstrikes against Iran, targeting its nuclear facilities, missile industry, and naval forces. This marks another sharp escalation in the conflict following the US military strikes on Iranian nuclear facilities in June last year. The military operation not only exacerbates already strained geopolitical tensions but has also sent shockwaves through global capital markets, which is expected to further boost defense stocks.
