Gold steadies as firmer dollar offsets Middle East risk premium

GOLD steadied after losing more than 1 per cent in the previous session, pressured by a stronger US dollar as the war in the Middle East showed no signs of abating.

Bullion was near US$5,090 an ounce in early trading, while a gauge of the US currency rose 0.4 per cent on Thursday and US Treasuries fell for a fourth day, lifting yields to the highest in several weeks.

That came as the US-Israeli war with Iran sent oil prices surging and prompted traders to trim bets on the Federal Reserve cutting interest rates. A stronger dollar and higher borrowing costs are both typically negative for bullion.

Global markets remained on edge as the war entered its seventh day. Iran launched a barrage of missiles and drone strikes across the Gulf region on Thursday evening, hitting an oil refinery in Bahrain, while Israel continued airstrikes on Teheran and the US suspended operations at its embassy in Kuwait. 

Spot gold edged up 0.2 per cent to US$5,093.63 an ounce as of 7.24 am in Singapore. Silver rose 0.3 per cent to US$82.47. Platinum and palladium advanced. BLOOMBERG