Gold drops under $5,100 as US Dollar strengthens

Gold Prices Slide Amid Stronger US Dollar

The value of gold (XAU/USD) dropped to approximately $5,085 in early Asian trading on Friday, pressured by a strengthening US Dollar. Investors are now turning their attention to the upcoming US employment data for February, which is expected to be a key market driver later in the day.

Rising energy costs, fueled by ongoing conflicts in the Middle East, have sparked renewed concerns about inflation. As a result, traders are reducing expectations for further monetary easing by the Federal Reserve. This shift has supported the US Dollar and put downward pressure on gold, which is priced in USD.

According to analysts at Morgan Stanley, “Recent market swings do not indicate a decline in gold’s appeal as a safe-haven asset. The primary factors behind the slowdown are the US Dollar’s strength and investors’ preference for liquidity.”

Despite the current pullback, heightened instability in the Middle East could renew demand for gold as a traditional safe-haven. On Thursday, Iran launched a new series of missile and drone attacks across the Gulf region, with incidents reported in the United Arab Emirates, Bahrain, Qatar, and Kuwait.

Iranian Foreign Minister Abbas Araghchi stated that Tehran has not requested a ceasefire nor is it seeking negotiations. Meanwhile, Iran’s Islamic Revolutionary Guard Corps warned that retaliatory actions are expected to escalate in the coming days.