Gold prices fell to their lowest in almost a week on Wednesday, as the dollar strengthened after US President Donald Trump's decision to pull the United states out of the Iran nuclear deal boosted oil prices and pushed Treasury yields higher. Raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies, Trump said he would reimpose US economic sanctions on Iran that had been lifted under the 2015 agreement.
Spot gold had fallen 0.65 percent to $1,305.16 an ounce by 0713 GMT, its lowest since May 3. US gold futures for June delivery were down 0.6 percent at $1,305.70 per ounce. "(Gold is) stuck between rising geopolitical risks and the stronger US dollar. The safe-haven buying certainly hasn't been as strong as we thought it might have been following Trump's announcement," said ANZ analyst Daniel Hynes.
During times of political or economic uncertainty, gold prices often receive a boost as the metal is widely considered a safe-haven asset alongside the Japanese yen. "An escalation (in tensions) in the Middle East will create volatility in the financial markets and as such healthier conditions for the safe-haven asset," Benjamin Lu, commodities analyst at Singapore-based broker Phillip Futures, said in a note. Spot gold may revisit its May 1 low of $1,301.51 per ounce as it failed three times to break resistance at $1,317, said Reuters technical analyst Wang Tao.
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