Gold prices rose on Tuesday after Asian markets opened. The price of one ounce increased by more than $40 and reached nearly $4,050.
The latest rise came after gold held firmly above the key $4,000 level for several days. Traders view this figure as an important psychological threshold. Its strength encouraged buyers and supported gains.
Regional tensions also pushed investors toward gold. The situation entered a new phase after the United States attacked Iranian targets. US President Donald Trump also warned that Tehran would pay a price for the deaths of American soldiers.
Meanwhile, Yemen’s Houthis threatened to impose a naval blockade on Saudi Arabia. The warning increased concern about the safety of energy routes in the Red Sea. However, reports of mediation efforts for a ten-day ceasefire eased fears of an immediate expansion of the conflict.
The US Federal Reserve will meet next week. Analysts expect it to keep interest rates unchanged. Investors will watch its guidance, especially on how higher energy prices may affect inflation.
Afzal Rahman, an executive at Singapore-based consultancy OCBC, said a stronger dollar and high interest rates still limit investor demand for gold. He added that tensions in the Gulf could create volatility in oil prices and inflation. These risks may keep gold under pressure until central banks begin to ease monetary policy.
Despite its recent strength, gold recorded a weak second quarter. The price of an ounce fell by 14% during the period. This marked its largest quarterly decline since 2013.
Gold now faces two opposing forces. Political uncertainty and security risks support demand for safe assets. At the same time, a strong dollar and high borrowing costs make gold less attractive. Investors will therefore focus on regional developments, Federal Reserve signals and future inflation data.
