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Gold Falls Below $3,370 as US Airstrikes on Iran Increase Geopolitical Uncertainty and Inflation Concern

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  • June 23, 2025
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Gold prices slipped on Monday even as geopolitical risk rose after coordinated US airstrikes on Iran’s nuclear sites. The military attack, code-named “Operation Midnight Hammer,” hit major targets and evoked strong world reactions, including Iranian warnings to block the Strait of Hormuz, a vital world oil transit route. While geopolitical volatility usually supports safe-haven assets such as Gold, prices continue to be capped below the $3,400 level due to strengthening US Dollar and investor prudence in the face of key monetary policy testimony by Federal Reserve Chair Jerome Powell. KEY LOOKOUTS • Iran’s possible decision to close the critical oil chokepoint can destabilize global energy supply and increase risks to inflation. • Markets look to Fed Chair Jerome Powell’s congressional testimony for hints regarding future interest rate policy in the face of inflation fears. • XAU/USD refuses to overcome the $3,400 psychological level despite increased geopolitical tensions. • Any Iranian retaliatory measures or escalation of conflict in the region might further increase safe-haven demand for Gold. Gold prices are in a tight range beneath $3,370 as geopolitical tensions rise after the US military attacks on Iran’s nuclear complex. Although in the generally favorable setup for safe-havens, the precious metal can’t make headway owing to the stronger US Dollar and market risk aversion ahead of major economic events. Iran’s warning to shut the Strait of Hormuz has contributed to inflationary pressures by driving Oil prices up, potentially making global monetary policy choices more difficult. Traders are watching events in the Middle East closely and Jerome Powell’s upcoming testimony before Congress for additional market guidance. Gold is holding below $3,370 even amid escalating geopolitical tensions following US attacks on Iran. Investor attention now turns to the Strait of Hormuz closure threat and Fed Chair Powell’s next policy testimony. • Gold is trading lower below $3,370 as tensions between US and Iran escalate following US coordinated airstrikes on Iranian nuclear facilities. • Operation Midnight Hammer involved major facilities in Fordow, Natanz, and Isfahan and received global condemnation and threats of retaliatory strikes. • Iran threatens to shut the Strait of Hormuz, a key oil supply channel, with energy disruption and inflation concerns. • Oil prices recover, backing safe-haven buying but not sufficiently to propel Gold beyond the $3,400 barrier. • US Dollar strengthens, limiting Gold’s rally even amidst geopolitical tensions and risk aversion. •  Investors watch for cues on future interest rate policy from Fed Chair Jerome Powell’s testimony as inflation risks escalate. • Gold’s major technical levels are resistance at $3,400 and support at $3,342, with a possible downside to $3,245 in case support is broken. Middle East tensions escalated at the weekend after the United States mounted a coordinated attack on Iran’s nuclear facilities, raising global concerns about regional stability and energy security. The operation, which was confirmed by President Trump and code-named “Operation Midnight Hammer,” was aimed at key Iranian nuclear facilities, provoking withering criticism from world powers and raising the threat of retaliation from Iran. Iran’s parliament has voted to shut down the Strait of Hormuz—a critical shipping route for almost 20% of the world’s oil supply—ratcheting up the possibility of a wider geopolitical and economic crisis. XAU/USD DAILY PRICE CHART SOURCE: TradingView Global markets are on tenterhooks as diplomatic fallout grows, with responses coming from the United Nations, China, and regional players. Though Iran has termed the strikes a sovereignty breach, its response is unclear, and investors closely follow the events. The heightened geopolitical tension has surged demand for safe-haven assets such as Gold, and inflation threats increase with the potential supply disruption in oil. Global policymakers, meanwhile face the mounting pressure to control inflation, now entwined with geopolitical tensions in the emerging situation. TECHNICAL ANALYSIS Gold XAU/USD is stuck below the strong psychological and structural barrier of $3,400. Until now, immediate support comes at $3,342, which also represents the 23.6% Fibonacci retracement of the February to April run. A break below this level can expose more downside to $3,321 (50-day SMA) and $3,245 (38.2% Fibonacci). A breakout above $3,400 on the upside can initiate fresh bullish momentum, aiming for the June high of $3,452 and even the all-time high around $3,500. Momentum indicators imply a neutral-to-caveat position as markets wait for clearer guidance. FORECAST If geopolitical tensions keep on rising—especially if Iran proceeds with its threat to shut down the Strait of Hormuz—Gold may witness fresh buying pressure as investors pour into safe-haven assets. A spike in Oil prices because of supply shocks could also fuel inflationary concerns, and this may keep central banks from cutting rates, boosting Gold’s popularity. At such a time, a move above the $3,400 level of resistance would pave the way for an advance to the June high of $3,452 and even test the record high at about $3,500. On the flip side, if tensions start to ease through diplomatic means or Iran holds back on retaliatory moves, market anxieties could ease, cutting down on the need for safe-haven assets such as Gold. A stronger US Dollar, fueled by hawkish Fed rhetoric or positive economic data, may also pressure Gold prices. In such a scenario, a fall below the $3,342 level of support could see prices head lower towards $3,321 and even $3,245, depending on whether inflation worries ebb and rate-cut speculation gains ground.

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Commodities Gold

Gold Price Resilient Amid Middle East Unrest and Fed Rate Cut Expectations; Rises Above $3,400

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  • June 13, 2025
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Gold prices are hanging in there, trading above the $3,400 level as heightened geopolitical tensions in the Middle East and Federal Reserve rate cut expectations drive safe-haven demand. Israel’s pre-emptive attack on Iran’s nuclear complex has increased concerns about a wider conflict in the region, leading investors to look for refuge in gold. At the same time, subdued U.S. inflation readings underpins the probability of another round of Fed easing in 2025, complementing gold’s positive bias. Nevertheless, a U.S. Dollar rebound censors further gains, capping the metal’s upside for now. Market participants still keep a close eye on global events, and technical indicators are still pointing towards a positive short-term picture for gold prices. KEY LOOKOUTS • Increased geopolitical tensions after Israel’s airstrikes on Iran can continue to fuel safe-haven demand for gold. • Deteriorating inflation data makes Federal Reserve rate cuts in 2025 more likely, adding further support for gold prices. • The recent U.S. Dollar rebound may limit gold’s upside strength, so currency fluctuations become a key watch item. • The principal support is at $3,400, and a move above the $3,500 level may indicate a new bullish trend towards new historic highs. Prices of gold are well-backed following the heightening Middle East tensions and anticipation of Federal Reserve rate cuts that drive demand for safe-haven assets among investors. Israel’s attacks on Iran’s nuclear facilities last week have increased concerns about an escalating broader regional war, which has led to a global risk-off sentiment expressed through sagging equity markets. Simultaneously, softer U.S. inflation data strengthens the case for monetary easing in 2025, which further supports non-yielding gold. However, the metal’s gains are somewhat limited by a recovering U.S. Dollar, which rebounded from multi-year lows. Overall, gold continues to trade above the $3,400 level, with technical indicators suggesting a bullish bias in the near term. Gold prices remain strong at above $3,400 as tensions in the Middle East rise and expectations of Fed rate cuts increase. Rebounding U.S. Dollar, however, restricts further upside. Investors remain fearful as geopolitical tensions and economic statistics influence market sentiment. • Gold remains at $3,400, slightly pulling back from a near two-month high on sustained geopolitical tensions. • Israel’s missile strikes against Iran’s nuclear sites fuel Middle East conflict, fueling safe-haven demand for gold. • Iran threatens sharp retaliation, feeding fears of a broader regional war that would further raise gold prices. • US inflation data is still sluggish, fueling anticipation for Federal Reserve rate cuts in 2025. • US Dollar reverses at multi-year lows, limiting upside for gold even with robust safe-haven flows. • Market technicals are still positive, with gold moving in an inclined channel and targeting a potential advance towards $3,500. • Support levels to watch are around $3,400 and $3,385, while a breakout above $3,500 can initiate new bullish momentum. Gold prices are well-sustained as increasing geopolitical tensions continue to fuel safe-haven buying. The Middle East crisis worsened dramatically following Israel’s pre-emptive bombing of Iran’s nuclear installations, heightening concerns of an extended regional war. Iran promised tough retaliation, increasing world uncertainty and encouraging investors to flee to the safety of such assets as gold. The war has already set off large-scale risk aversion, evident in global equity market drops, as worries increase over the prospects of a wider, longer war. XAU/USD DAILY PRICE CHART CHART SOURCE: TradingView Economic conditions, besides geopolitical, are also adding to the attraction of gold. Recent inflation figures for the U.S. have displayed a moderate rise, supporting market sentiment that the Federal Reserve will start reducing interest rates in 2025. Reduced borrowing costs tend to favor non-yielding assets such as gold, making them more attractive to investors. While this, meanwhile, still poses another source of uncertainty in the world’s economic prospects, supporting safe-haven inflows into gold. TECHNICAL ANALYSIS Gold is still within a clean upward-sloping channel, which confirms a strong short-term bull trend. The price still holds above the $3,400 level, with daily chart oscillators still in bullish positions, which attests to the optimistic outlook. A sustained break through the psychological $3,500 level, which coincides with the top of the rising channel, would serve as a new catalyst for additional bull pressure. On the other hand, any potential pullbacks are likely to be supported around $3,400, while a breach below $3,385 would target the next support area around $3,355-$3,330. FORECAST If Middle Eastern geopolitical tensions continue to rise and the Federal Reserve remains dovish, gold prices could be well-supported in the short term. Further breaks above the $3,500 psychological level could be a catalyst for additional gains, with the potential to drive the price to new all-time highs. Ongoing safe-haven flows, along with decelerating inflation and weakening economic data, would tend to spur additional bullish momentum for gold. On the negative side, if diplomacy lowers tensions in the Middle East or if better-than-expected US economic data lowers the odds for Fed interest rate cuts, gold may come under selling pressure. A sustained break below the $3,400 support level may trigger a more substantial correction, with the next significant support at $3,385. More losses could test the $3,355 to $3,330 area, potentially tilting the short-term picture in favor of bearish traders.

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Commodities Gold

Gold Price Drops on Trade Optimism, but Downside Risks are Contained by Fed Outlook and Geopolitical Tensions

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  • May 16, 2025
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Gold prices have experienced modest intraday losses on Friday as renewed optimism surrounding the transitory US-China trade truce trimmed safe-haven demand. Nevertheless, the downside is contained as diminishing US economic data fuels the view of additional Federal Reserve rate reductions, which keeps the US Dollar weak and buoying non-yielding assets such as gold. Continuing geopolitical tensions, such as rising violence in Gaza and shaky peace negotiations between Russia and Ukraine, also underpin gold’s support. Technically, gold continues to be range-bound with major resistance at $3,255 and support at $3,177, while investors wait for a clearer directional cue. KEY LOOKOUTS • Developments or reversals in the 90-day trade ceasefire could exert a major influence on safe-haven demand and shape gold prices. • Further Federal rate cuts now market bets on weak US economic data to hold firm, underpinning gold by depressing the USD and Treasury yields. • Mounting tensions in Gaza and also ambiguous results from Russian-Ukrainian talks for peace could maintain safe-haven interest in gold. • The key resistance is still at the $3,252–$3,255 area, while support is close to $3,178 and $3,120. A move above either of these levels could decide the next direction. Gold dealers need to keep a close watch on events on several fronts. The 90-day US-China trade ceasefire still is bearing down on safe-haven demand, but any indication of breakdown would restore bearish sentiment very fast. Meanwhile, dovish hopes from the Federal Reserve, following weaker US inflation and retail numbers, should continue to keep the US Dollar and Treasury yields under stress, supporting non-yielding assets such as gold. Geopolitical threats, especially in Gaza and Eastern Europe, continue to stay high and may trigger fresh demand for security. Technically, gold has to convincingly break above resistance at around $3,255 to make a move towards $3,300 possible, while persistent weakness below $3,177 may leave the metal vulnerable to further declines towards $3,120 and $3,100. Gold prices are still under pressure from US-China trade optimism but are supported by dovish Fed expectations and escalating geopolitical tensions. Watch resistance at $3,255 and support at $3,177 levels. A breakdown on either side can set up the next short-term trend. • Gold is seeing modest intraday losses as demand for safe-haven is pressured with US-China trade truce optimism. • Lower US economic indicators, such as PPI and CPI, have supported expectations of additional Fed rate cuts. • US Dollar is still weak, as decreasing Treasury yields cap its rally, indirectly favoring gold. • Geopolitical tensions remain in place, with Gaza conflicts and Russia-Ukraine peace talks at a standstill upholding demand for gold. • Technical resistance at $3,252–$3,255 needs to be overcome for the prospect of a rally up to $3,300. • Support at $3,178 is nearest, with a further fall potentially reaching $3,120 and $3,100. • Market players are hesitant, waiting for firm directional signals as mixed economic indicators and geopolitical tensions prevail. Gold prices remain under pressure as confidence about the temporary US-China trade ceasefire diminishes the need for safe-haven assets. The 90-day tariff cease-fire agreement calmed fears of an impending global slowdown in economic growth. This improved mood has shifted attention among investors to riskier assets, short-term undermining gold’s attractiveness. Furthermore, hints of breakthroughs in trade negotiations with other major economies such as India, Japan, and South Korea have further strengthened market optimism. XAU/USD DAILY PRICE CHART CHART SOURCE: TradingView This notwithstanding, a number of underlying factors continue to underpin gold’s hedge function. Ongoing geopolitical tensions, led by the deepening Gaza conflict and the frozen Russia-Ukraine peace talks, keep global uncertainty high. Meanwhile, softer-than-anticipated US economic figures have made the argument for additional cuts in interest rates by the Federal Reserve even more compelling. This has depressed the US Dollar and Treasury yields, indirectly buttressing gold’s appeal on the bigger market platform. TECHNICAL ANALYSIS Gold’s latest attempt at rebounding failed at the doorstep of a critical resistance band of $3,252–$3,255, a sign of insufficient bullish pressure. The momentum indicators on the daily graph still show weakness, reflecting caution among the traders. On the downside, a break below the $3,200 price level may trigger selling pressure, with support potentially found around the $3,178–$3,177 zone. A persistent push past the zone of resistance is required to validate a change in attitude and set the stage for a more pronounced bull trend. FORECAST Gold can rebound with a bullish trend if tensions on the geopolitical front continue to rise or if the next round of US economic news keeps indicating a weakening economy. A continued dovish stance from the Federal Reserve, coupled with declining Treasury yields and a softer US Dollar, might propel renewed demand for non-yielding yellow metal. If investor appetites revert to safe-haven assets, gold might experience steady gains if market uncertainty continues to be high owing to international conflicts or stalled worldwide negotiations. Conversely, any substantial advancement in global trade talks—especially a lasting agreement between China and the US—may lessen demand for gold as a protective hedge against uncertainty. Moreover, if US economic statistics surprise the upside, Fed rate cut hopes in the markets might soften, lifting the US Dollar and Treasuries, thereby putting a dampener on gold prices, particularly in the absence of instant geopolitical shocks that could lead to a deeper near-term correction.

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