Gold prices rose on Monday in Asia and traded above the key $1,400 level amid intensifying conflicts between the U.S. and Iran.
Gold futures for August delivery, traded on the Comex division of the New York Mercantile Exchange, were up 0.5% at $1,406.55per ounce by 12:38 AM ET (04:38 GMT).
Prices of the yellow metal gained today as conflict in the Middle East reached new heights. Late last week, Iran shot down an American surveillance drone and accused the U.S. of incursion and spying over Iranian airspace, while the Pentagon said that the aircraft was in international airspace when it was targeted.
The administration most recently accused Iran of last week's attacks on oil tankers in the Persian Gulf, which Tehran strongly denied involvement in the explosion.
Gold is often considered a safe haven in times of political and economic uncertainty.
Meanwhile, a more dovish U.S. Federal Reserve has supported the gold market while the US-China trade conflict continued to dent investor sentiment.
Last week, the central bank opened the door for a possible rate cut in the future amid mounting risks to the economy from slowing inflation and global trade tensions.
Lower interest rates make safe-haven assets such as gold, which does not yield interest, more attractive while weighing on the U.S. dollar.
A speech from Federal Reserve Chair Jerome Powell at the Council on Foreign Relations in New York on Tuesday this week is expected to be in focus. He will discuss the economic outlook and monetary policy.
On the Sino-U.S. trade front, Trump announced last week that he would hold an “extended meeting” with Xi on the sidelines of the G20 summit in Japan. The two-day summit gets underway on Friday.
Helping bullion’s appeal, the dollar index fell to near a three-month low against a basket of currencies.
The U.S. dollar index last traded at 95.643, down 0.1%.
