Gold prices edged lower in early Asian trade as prospects of dollar strength made the precious metal more expensive for holders of non-dollar currencies. Market participants closely watched currency movements amid global economic uncertainties, with investors reassessing their positions in alternative assets during this period of market transition.

DHF Capital's Bas Kooijman highlighted two key factors affecting gold: stalled diplomatic efforts in the Middle East and potential disruptions in the Strait of Hormuz. These developments could push energy prices higher, fuel inflation concerns, and drive Treasury yields upward, creating headwinds for nonyielding assets like gold in the current market environment.

The precious metal faces pressure from multiple fronts as investors reassess their positions. Spot gold declined 0.1% to $4,591.53 per ounce, reflecting ongoing market sentiment that favors interest-bearing assets when inflation fears rise and the dollar strengthens against other global currencies, particularly those tied to commodity-exporting nations.