Gold Rises as Iran Sanctions Spur Safe-Haven Demand

Gold prices resumed their uptrend on Monday, as US Treasury Secretary Bessent revealed sanctions on Iran-linked entities, reigniting safe-haven sentiment in the market. After briefly hitting a three-month high earlier, gold traded near $4,641, with investors closely watching the Federal Reserve Chair's speech at the Jackson Hole symposium on Friday for clues on the future monetary policy path.

**Geopolitical Risks Drive Safe-Haven Buying**

The latest US sanctions against Iran have intensified concerns over Middle East geopolitical tensions. Reports indicate the move is a response to recent attacks on commercial vessels, with US officials calling Iran's actions "unacceptable" and warning of consequences. This escalation directly spurred investor demand for traditional safe-haven assets like gold, pushing prices higher in early Monday trading. Historical data shows that similar geopolitical conflict events often provide strong short-term support for gold prices.

**Market Focuses on Fed Policy Signals**

Beyond safe-haven sentiment, the market's greater attention centers on the upcoming Fed Chair speech. Investors are seeking to interpret the Fed's balancing act between inflationary pressures and economic growth, as well as clues on the future rate hike path. Recent weak economic data has prompted markets to trim expectations for near-term Fed rate hikes, but the Fed still emphasizes its commitment to curbing inflation. The CME's "FedWatch" tool showed that, as of last week, traders priced in roughly a 60% probability of a September rate hike, and shifts in these expectations will continue to influence gold's appeal.

**Mixed Bullish and Bearish Factors Leave Gold Outlook Uncertain**

Despite geopolitical risks providing upward momentum for gold, a strong US dollar and rising Treasury yields still pose headwinds. On Tuesday, the dollar index edged up following the US revocation of Iran's oil sales authorization, while the 10-year Treasury yield climbed to around 4.525%, increasing the opportunity cost of holding non-yielding gold. Some analysts note that the Fed's path of maintaining high rates remains a key headwind for gold prices. Therefore, whether gold can sustain its rally will depend on the outcome of the tug-of-war between safe-haven demand and rate expectations.