Gold prices edged higher after suffering their worst weekly decline in more than four decades, as investors reassessed the precious metal's safe-haven appeal amid escalating Middle East tensions. The modest recovery reflects traders' renewed interest in gold as a hedge against geopolitical uncertainty, with the recent selloff creating buying opportunities for those seeking portfolio protection.

Gold's dramatic plunge last week marked the sharpest weekly drop since the 1980s, driven by a combination of factors including rising bond yields and a stronger dollar. The metal's traditional role as a safe haven was tested as investors weighed the impact of the ongoing conflict in the Middle East against broader economic concerns. The recent volatility underscores gold's sensitivity to both geopolitical events and monetary policy expectations.

Despite the rebound, gold remains under pressure from higher interest rates and inflation data that has exceeded expectations. The market's reaction to the Middle East situation will likely continue to influence gold's trajectory in the near term, with traders closely monitoring developments for signs of further escalation or potential de-escalation.