Gold inches higher as Iran-Israel tensions offset dollar strength
Spot gold was up 0.2% at $3,375.79 an ounce, as of 0939 a.m. EDT (1339 GMT). U.S. gold futures gained 0.2% at $3,391.70.
The U.S. dollar index rose 0.5%. A stronger U.S. currency makes gold less affordable for other currency holders.
Israel's military bombed Evin prison in northern Tehran, a potent symbol of Iran's governing system, in what Israel called its most intense bombing yet of the Iranian capital a day after the United States joined the war. Meanwhile, Iran repeated earlier threats to retaliate against the U.S.
"If we don't see significant inflation on top of what we're already seeing from tariffs, that ultimately means more risk appetite. So, gold safe haven purchases may moderate a little bit, at least in the short run," said Bart Melek, head of commodity strategies at TD Securities.
"I think prices will stay fairly stable, maybe moving up or down by around $75," he added.
Gold is traditionally seen as a hedge against inflation and a safe haven during times of uncertainty. However, higher interest rates reduce its appeal, as it doesn't generate any yield.
Investors also await the U.S. Personal Consumption Expenditures data due later this week.
Last week, the Federal Reserve left the U.S. policy rate in its current 4.25%-4.50% range with policymakers hinting at possible rate cuts later this year, though Chair Jerome Powell expressed uncertainty due to tariff policy and economic response.
Spot silver was up 0.4% at $36.14 per ounce and platinum rose 2.1% to $1,291.50.
Palladium gained 2.% to $1,070.09, reaching its highest level since June 12.
(Reporting by Sarah Qureshi in Bengaluru; Editing by Shailesh Kuber)
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