Gold prices are seen falling above $4,980 due to selling pressure despite the intense geopolitical conflict in the Middle East, market players will be closely monitoring developments surrounding the US-Iran war.
At 9.30 am, gold prices were at $4,995, down 0.50% since it opened in early trading on Monday in the Asian session.
The administration of US President Donald Trump expects the military conflict in Iran to end within a few weeks or sooner if the situation on the battlefield is under control.
However, the Israeli military has signaled that its military operations are expected to continue for at least another three weeks as part of the ongoing campaign.
Last weekend, the US military launched an attack on several military facilities on Kharg Island, which is Iran's main oil export hub and a strategic location for the country's oil shipments to global markets.
The move comes as tensions escalate after Iran warned it would retaliate against any US-linked oil facilities in the Middle East.
Normally, large-scale geopolitical conflicts would drive gold prices higher as investors seek safe havens. But in the current situation, energy markets have become the dominant factor as oil prices surged amid concerns about global supply disruptions.
The rise in energy costs has sparked renewed concerns about global inflationary pressures. This has led investors to expect the US Federal Reserve (Fed) to delay plans to cut interest rates.
Expectations of continued high interest rates have weighed on gold as the precious metal does not offer interest returns, making it less attractive than yielding assets.
