Gold prices are recovering during the US session on Monday, as escalating geopolitical tensions and shifts in the Federal Reserve's (Fed) interest rate narrative have led to a resurgence in bullish momentum. The US airstrikes on Iranian nuclear sites over the weekend triggered a sharp response from Tehran, which condemned the attacks as a major provocation and launched retaliatory missile and drone strikes on Israel.
The renewed conflict has heightened fears of a broader regional escalation. Meanwhile, Fed Governor Michelle Bowman signaled openness to a potential interest rate cut as early as July, citing easing inflation pressures. Her comments added to speculation around the Fed's next move, with markets now turning their focus to Chair Jerome Powell's testimony before Congress on Tuesday for further policy clues.
Geopolitical risks surge, boosting Gold's safe-haven flows
US President Donald Trump confirmed that American forces bombed three of Iran's key nuclear facilities – Fordow, Natanz, and Isfahan on Saturday night.
In a televised address from the White House Briefing Room, Trump described the mission as "a very successful attack," warning that "there are many other targets" if Iran does not seek peace.
The US coordinated strikes on Iran, dubbed Operation Midnight Hammer, involved B-2 Spirit bombers and Tomahawk missiles from US submarines. Iranian Foreign Minister Abbas Araghchi called the attacks "a heinous crime" in a state broadcast interview, warning of "everlasting consequences." His remarks were later confirmed and quoted by Reuters on Sunday.
Iran's parliament approved a motion to close the Strait of Hormuz an Oil transit chokepoint for nearly 20% of global supply. The final decision now lies with the Supreme National Security Council. Oil prices spiked in response, adding to inflation risks and supporting safe-haven flows into Gold.
Source: Fxstreet
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