Gold prices are back nearing $4,100 after experiencing a downward trend since the week opened as investors took a cautious approach following the resurgence of geopolitical tensions in the Middle East.
At the same time, the market is also awaiting the announcement of the Federal Reserve (Fed) meeting minutes which are scheduled to be released later.
At exactly 9.30 am, gold prices were trading at $4,100, down 0.16% since it opened in early trading on Wednesday in the Asian session.
Pressure on market sentiment increased after the United States announced retaliation against Iran following the alleged attack on three oil tankers around the Strait of Hormuz.
According to the US Central Command (CENTCOM), the military operation was launched in response to the attack on commercial ships passing through the international shipping lane.
The development has sparked new concerns about the stability of global energy supplies despite Washington and Tehran previously reaching a temporary peace agreement that reopened the Strait of Hormuz.
The risk of oil supply disruptions could increase inflationary pressures, posing a challenge to gold's performance.
However, the decline in gold prices is expected to remain limited after the US Non-Farm Payroll (NFP) data for June recorded a weaker-than-expected reading.
The US economy added only 57,000 jobs compared to market expectations of 110,000, reinforcing expectations that the Fed may take a more cautious approach to interest rate policy going forward.
