Bullion prices have been trending lower since the week opened nearing $5,000 amid the strengthening of the US dollar following the US NFP jobs report for February being the main focus tonight (Friday).
At 8.50 am, gold prices were at $5,084, up 0.09% since it opened in early trading on Friday in the Asian session.
The surge in oil and gas prices following the conflict in the Middle East has sparked new concerns about global inflationary pressures.
This situation has prompted traders to reduce expectations for further easing of monetary policy by the Federal Reserve (Fed).
As a result, the US dollar strengthened and put pressure on commodity prices traded in USD denominations.
Morgan Stanley analysts stated that the current uncertainty does not indicate that demand for gold as a safe-haven asset is weakening. The current decline in gold prices is more influenced by two main factors, namely the strengthening of the US dollar and investors' tendency to seek liquidity in the market.
However, rising tensions in the Middle East could potentially support demand for safe haven assets like gold.
Iran reportedly launched a new wave of missile and drone attacks in several Gulf regions on Thursday, including in the United Arab Emirates, Bahrain, Qatar and Kuwait.
In a related development, Iranian Foreign Minister Abbas Araghchi said that Tehran had not asked for a ceasefire and had no plans to negotiate.
Iran's Islamic Revolutionary Guard Corps also warned that retaliatory strikes would continue to escalate in the coming days.
