Gold prices are still struggling to find their best position after extending their decline to near $4,300 due to escalating tensions in the Middle East and expectations that the Fed will maintain interest rates in the future.
At 10 am, gold prices were trading at $4,322, down 0.14% since it opened in early trading on Monday in the Asian session.
Gold prices continued to face pressure as market sentiment was affected by geopolitical developments in the Middle East and stronger-than-expected US economic data.
Reuters reported that the Israeli military successfully intercepted a wave of missiles launched by Iran on Sunday, making it the first such attack since early April.
At the same time, Iranian officials warned that any Israeli military action against Iran or Lebanon would be met with a larger and more comprehensive response.
US President Donald Trump is reportedly set to call Israeli Prime Minister Benjamin Netanyahu to avoid any retaliation that could escalate tensions.
Trump stressed that nuclear talks between Washington and Tehran are still ongoing and that Iran's latest attacks have not changed his efforts to reach an agreement with the Islamic republic.
In the United States, the employment report published last Friday showed that the labor market remains strong. Non-Farm Payroll (NFP) data recorded an increase of 172,000 jobs in May, far exceeding market expectations of 85,000 jobs.
At the same time, the unemployment rate remained stable at 4.3%, in line with analyst forecasts.
The combination of geopolitical tensions and positive economic data has reduced expectations of an interest rate cut in the near future by the Fed.
The expected high interest rate environment continues to support the strengthening of the US dollar, thus putting pressure on gold, which does not offer interest returns to investors.
