Gold prices rebounded 1.4% to $5,158.27 per ounce in Asian trading Wednesday, recovering from a 4.5% plunge the previous day. The precious metal's volatility reflects investors reassessing safe-haven demand amid escalating U.S.-Iran tensions and a stronger dollar.

The dollar's strength typically weighs on gold by making it more expensive for foreign buyers, but ongoing Middle East conflict is offsetting this pressure. Coordinated U.S. strikes on Iranian-linked targets have drawn retaliatory threats from Tehran, stoking fears of broader regional instability and potential energy supply disruptions.

Oil prices remain elevated on concerns about shipping routes in the Gulf, adding to inflation worries and reinforcing gold's appeal as a hedge against geopolitical and price risks. Analysts note the metal is caught between competing forces: safe-haven flows from uncertainty versus headwinds from dollar strength and elevated Treasury yields.