Gold Surges to $2,055 as US Interest Rates Decline

Gold extends its three-day rally, reaching $2,055 per troy ounce in Asian trading on Monday. The surge is fueled by risk aversion from Middle East political tensions and speculation about a March interest rate cut by the Federal Reserve (Fed).

Escalating Israel-Gaza conflict, especially after an Iranian-led Houthi missile attack on the USS Laboon, boosts Gold demand as a traditional safe-haven asset. Concerns linger over potential disruptions in the Hormuz Strait, and Iran's response to recent political developments is closely watched.

The US Dollar (USD) hovers around 102.40, influenced by declining US Treasury yields, possibly triggered by weak Producer Price Index (PPI) data. The US Dollar Index (DXY) trims gains as US Treasury bond yields decrease, with the 2-year and 10-year yields at 4.14% and 3.94%, respectively.

Barclays' Friday revision anticipates a March Fed rate cut, shifting market sentiment towards Fed monetary policy easing, pressuring the Greenback. Barclays analysts expect a 25 basis points reduction at the March Federal Open Market Committee (FOMC) meeting.