Gold rebounded on Tuesday as heightened geopolitical uncertainty stemming from Israel-Iran fighting and U.S. President Donald Trump’s call to evacuate Tehran led investors to seek safe-haven assets.
Spot gold rose 0.4% at $3,396.67 an ounce, as of 0239 GMT, after dropping more than 1% on Monday.
U.S. gold futures were steady at $3,416.30.
“Market sentiment continues to swing between escalation and de-escalation regarding events in the Middle East, and these back-and-forth sentiment shifts are what is driving the gold price’s moves either side of the $3400 level,” KCM Trade Chief Market Analyst Tim Waterer said.
The fifth consecutive day of fighting between Israel and Iran saw Israel strike Iran’s state broadcaster on Monday, while the head of the U.N. nuclear watchdog reported extensive damage to Iran’s largest uranium enrichment facility.
Trump, returning early from the G7 summit in Canada Monday night, urged Iranians to evacuate Tehran, citing the country’s rejection of a nuclear weapons development curb deal.
Reports also indicated that Trump had requested the national security council to remain prepared in the situation room.
Gold is considered a safe-haven asset during times of geopolitical and economic uncertainty.
“There is enough prevailing uncertainty surrounding both tariff wars and actual wars to buttress the gold price and keep it within sight of a potential return to $3,500,” Waterer said.
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Investors are also looking forward to U.S. Federal Reserve meeting scheduled to start later in the day, with decision on Wednesday.
The Fed is expected to hold rates steady but the focus yet again will be on the path its Chair Jerome Powell charts out for future rate cuts. Traders are currently pricing in two cuts by this year-end.
Elsewhere, spot silver was up 0.3% at $36.41 per ounce, platinum rose 0.6% to $1,251.20, while palladium edged up 0.2% to $1,031.68.
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