Gold Finds Support as Dollar Weakens, Even as Middle East Tensions Ease

Gold edged higher at the start of the week, recovering above $4,060 as a softer US dollar encouraged bargain hunting. The rebound came despite signs that geopolitical tensions in the Middle East may be easing.

Safe-haven demand isn't the only force driving gold anymore. As expectations for immediate military escalation faded, investors shifted their attention back to the US dollar and Treasury yields, two factors that continue to play a much bigger role in shaping bullion prices.

That helps explain why gold has remained relatively resilient. While lower oil prices reduced some inflation concerns, a weaker dollar made bullion more attractive for overseas buyers and helped offset the loss of geopolitical support.

The technical picture is also starting to stabilise. Gold is attempting to build a base above $4,050, suggesting buyers are becoming more active after last week's pullback. A move back above $4,100 would improve short-term sentiment, while losing $4,000 could invite another round of selling.

Rather than reacting to every headline from the Middle East, traders are now watching whether the dollar and Treasury yields continue to soften. If those headwinds begin to fade, gold could extend its recovery even without a fresh surge in safe-haven demand.