BENGALURU (Reuters) - Gold prices fell in Asian trading on Wednesday, as the dollar regained ground after U.S. President Donald Trump’s decision to pull the United states out of the Iran nuclear deal boosted oil prices and pushed Treasury yields higher.
Raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies, Trump said he would reimpose U.S. economic sanctions on Iran that had been lifted under the 2015 agreement.
The dollar rose against the yen as oil prices climbed to a 3-1/2-year high, pushing yields on the benchmark 10-year Treasury note closer to 3 percent.
Spot gold had fallen 0.2 percent to $1,311.44 per ounce by 0346 GMT.
U.S. gold futures for June delivery were about 0.2-percent lower at $1,311.70 per ounce.
“(Gold is) stuck between rising geopolitical risks and the stronger U.S. dollar. The safe-haven buying certainly hasn’t been as strong as we thought it might have been following Trump’s announcement,” said ANZ analyst Daniel Hynes.
During times of political or economic uncertainty, gold prices often receive a boost as the metal is widely considered a safe-haven asset alongside the Japanese yen.
Meanwhile, Trump and Chinese President Xi Jinping discussed ongoing trade issues on Tuesday, as both sides continue to position themselves amid a heated feud over tariffs between the world’s two largest economies.
Spot gold may revisit its May 1 low of $1,301.51 per ounce as it failed three times to break resistance at $1,317, said Reuters technical analyst Wang Tao.
In other precious metals, silver slipped 0.1 percent to $16.42 an ounce.
Platinum rose 0.1 percent at $912.50 per ounce, while palladium gained 0.3 percent at $972.40 an ounce.
Reporting by Apeksha Nair in Bengaluru; Editing by Biju Dwarakanath and Joseph Radford