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Commodities Gold

Gold Price Falls on Modest USD Strength, but Geopolitical Uncertainty and Fed Rate Cut Speculation Provide Support

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  • August 4, 2025
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Gold prices started the week lower, pulling back from recent highs as the US Dollar recovered some ground against a modest rise in Treasury yields. But the negative for the precious metal seems to be in short supply given rising market hopes for a September Federal Reserve rate cut, political tension over the Fed’s independence, and rising geopolitical tensions following the deployment of US nuclear submarines off Russia. All this continues to support gold’s status as a safe-haven asset, and the overall outlook remains cautiously bullish even with short-term ups and downs. KEY LOOKOUTS • Ongoing speculation of a rate cut continues to limit USD strength and underpins gold prices. • Deployment of US nuclear submarines off Russia increases safe-haven demand in the face of increasing global uncertainty. • Deterioration in weaker-than-expected Nonfarm Payroll numbers and revisions signal a slowing economy, supporting gold. • Look for support at $3,300 and resistance at $3,370–$3,400 for possible breakout or pullback signals. Gold prices fell slightly at the beginning of the week as reduced Treasury yield pressures allowed the US Dollar to recover some ground. This slight fall aside, the forward-looking precious metal continues to be supported by increasing anticipation of a Federal Reserve rate cut in September, which has moderated wider USD advances. Further, geopolitical uncertainties—specifically the deployment of US nuclear submarines off Russia—are also lending additional support to gold’s safe-haven status. Traders are now looking to future US economic data and risk sentiment for guidance on the next move for XAU/USD. Gold price inches lower on modest USD strength but is underpinned by expectations of Fed rate cuts and elevated geopolitical tensions. Market attention now turns to release of US economic data and overall risk appetite for further guidance. • Gold price retreated from more than one-week high at $3,369 on fresh USD buying. • Modest recovery in US Treasury yields underpinned the US Dollar, driving gold prices lower. • September Fed rate cut hopes remain to cap non-yielding gold’s downside. • Soft US jobs data, including below-forecast Nonfarm Payrolls, fueled rate cut expectations. • Political tension surrounding the independence of the Fed is suppressing aggressive USD rebound. • Geopolitical concerns escalated after the US sent nuclear submarines to the vicinity of Russia. • Technical support remains at $3,300, and a breach above $3,370 may lead to $3,400+. Gold still draws the interest of investors amidst a complicated combination of economic and geopolitical events. Although the metal started the week weaker, its long-term attraction is firm because market belief is increasingly building that the Federal Reserve is moving towards the start of a rate-cutting cycle, perhaps in September. The latest US jobs report, which recorded a significant slowdown in job recruitment and a rise in unemployment, has added to the perception that the US economy is slowing. This supports the case for softer interest rates, which have traditionally helped gold since it does not pay interest and tends to thrive in low-rate conditions. XAU/USD DAILY PRICE CHART SOURCE: TradingView Meanwhile, political uncertainty is growing. The impromptu removal of the head of the Bureau of Labor Statistics by President Trump and the resignation of a Federal Reserve governor have spooked the market with fears over the independence of the Fed. The incidents raise the wariness of investors and improve the attraction of safe-haven instruments such as gold. Geopolitical tensions also continue to mount, with the deployment of US nuclear submarines off Russia in response to aggressive rhetoric, adding further to concerns of international instability. These considerations together create a solid fundamental underpin for gold over the coming weeks. TECHNICAL ANALYSIS Gold broke above the resistance level of $3,335 recently and also above the 100-period Simple Moving Average (SMA) on the 4-hour chart, reflecting short-term bullish momentum. Oscillators are becoming positively more bullish, indicating ongoing dip-buying interest near support levels. Primary support now resides in the vicinity of $3,340–$3,338, with additional buying anticipated near $3,320 if that does come under test. On the positive side, a continued move through the new high of $3,369–$3,370 would seal the bullish trend and leave the way open toward the psychological $3,400 level, potentially retesting the all-time high around $3,500 if support persists. FORECAST If positive sentiment prevails, fueled by a hoped-for September Fed rate cut and increased geopolitical tensions, gold might reattack the $3,370 resistance level. A breach above this region may trigger a retest of the $3,400 psychological level. Continued buying and positive risk-off sentiment might even propel the metal to the $3,434–$3,435 obstacle, and ultimately, a retest of the all-time high around $3,500 is still in play if uncertainty in the world continues. Conversely, if the US Dollar continues to appreciate further based on more robust-than-expected economic data or a more aggressive Fed stance, gold could experience selling pressure. Support begins around the $3,340–$3,338 area, which lines up with the 100-period SMA. A firm break below this zone could set further losses in motion towards $3,320, and sustained losses might take the price towards the make-or-break $3,300 level. A violation of this mark could turn momentum in the bears’ direction.

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Commodities Gold

Gold Price Retains Mild Gains Prior to FOMC; Strong US Dollar Puts Upside on a Lid

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  • July 29, 2025
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Gold prices are trading with a mild positive bias on Tuesday, trying to stage a recovery from a multi-week low in the vicinity of the $3,300 region after fresh safe-haven interest was stirred up by geopolitical tensions and uncertainty before the FOMC policy decision. Although optimism around trade and continued US-China negotiations provides some respite, the potential upside continues to be capped by a stronger US Dollar as it is sustained by expectations of the Federal Reserve keeping interest rates elevated for an extended period. Investors are waiting and want to see important cues from the Fed statement and Chair Powell’s speech that will define the short-term trajectory of the XAU/USD pair. KEY LOOKOUTS • The Fed interest rate move and Chair Powell’s speech this week are awaited by markets for leads on the rate path ahead, which may trigger significant gold moves. • The USD is solid in expectations of extended higher interest rates, serving as a significant headwind to gold’s potential upside. • Concerns over the Russia-Ukraine crisis and US-China trade talks continue to underpin safe-haven demand for gold. • Important resistance is at $3,340 and $3,367, with the possibility of further decline to the $3,260 support area on a break below $3,300. Gold prices are exhibiting minor gains above the $3,300 mark as investors anticipate Wednesday’s pivotal FOMC policy announcement. While the metal is supported by safe-haven demand in the face of geopolitical uncertainties and trade tensions, its bullishness is capped by the ongoing strength of the US Dollar underpinned by expectations of extending higher interest rates. Investors are holding back and awaiting direction from the Federal Reserve on future monetary policy, as well as keeping an eye on US economic indicators and world risk appetite for short-term guidance. Gold prices trade with marginal gains above $3,300 on amid cautious market sentiment before the FOMC announcement. The strong US Dollar and expectations of interest rate hikes limit the upside, and safe-haven demand provides limited support. • Gold price trades with a mild positive bias above the $3,300 level, bouncing back from a multi-week low. • Safe-haven demand finds support for gold amidst continued geopolitical tensions and global trade news. • The US Dollar continues to be solid, capping the potential for gold higher on expectations of sustained higher interest rates. • Traders are hesitant prior to the FOMC rate decision, anticipating no rate move but wanting clues on subsequent policy. • Technical resistance is around $3,340–$3,368, and key support is at $3,260–$3,255, just near the 100-day SMA. • Optimism over US-China and US-EU trade fills in a positive note, but insufficient to fuel aggressive gold buying. • Future US economic releases (JOLTS, Consumer Confidence) can potentially drive near-term USD action and affect gold prices. Gold prices are holding firm above the $3,300 threshold as investor attention is turned to this week’s pivotal FOMC policy announcement. With the Federal Reserve strongly anticipated to hold interest rates steady, market players are eagerly awaiting any indication of potential future rate actions that may influence larger financial market directions. The risk-averse sentiment among traders is an indicator of skepticism regarding the policy direction of the US central bank, particularly in the face of sticky inflation and pockets of economic strength. Meanwhile, gold keeps gaining modestly from its safe-haven demand as investors respond to global geopolitical events. XAU/USD DAILY PRICE CHART SOURCE: TradingView Compounding market mood is also a new wave of trade-related optimism following recent US agreements with the EU and Japan. In addition, pre-scheduled negotiations between US and Chinese top leaders indicate continued attempts to contain economic tensions between the world’s largest two economies. At the same time, geopolitical tensions related to Russia and Ukraine, especially in the wake of the US President’s fresh deadline and warning on sanctions, maintain global risk sentiment nervous. All these factors together provide a conservative but bull market environment for gold, despite the US Dollar remaining steadfast. TECHNICAL ANALYSIS Gold is finding it hard to pierce the near resistance area of $3,340–$3,368, which has thwarted recent attempts at recovery. The persistent inability to hold above this point indicates the establishment of a possible multiple top pattern on the daily chart. Further, momentum indicators have begun to reflect bearish divergence, indicating waning bullish bias. If prices slide beneath the $3,300 psychological level, then it may lead to further losses towards the $3,260–$3,255 support area, which coincides with the 100-day Simple Moving Average (SMA) and may act as a decisive pivot area for the next move. FORECAST If gold is able to hold above the $3,300 mark and break over the nearest resistance of $3,340, then it may lead to a short-covering rally. A break decisively above the $3,368 level can potentially pave the way for a further upward move to the psychological $3,400 level. Sustained strength here could drive prices towards the $3,434–$3,435 area, with scope to test the all-time high in the vicinity of $3,500 if positive sentiment gains more momentum, particularly on back of dovish Fed hints or escalating geopolitical tensions. On the negative side, inability to maintain the $3,300 support level may confirm the bearish bias and intensify declines towards the $3,260–$3,255 area, a crucial region demarcated by the 100-day SMA. Sinking below this area may trigger further selling pressure, potentially pushing gold prices down towards the $3,230 level or even $3,200 in the near future. Continuing USD strength or a more hawkish Fed tone may further dampen the metal and intensify the corrective move.

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Commodities Gold

Gold Price Stays Firm as Safe-Haven Demand Grows with Trade Tensions and Dollar Pullback

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  • July 16, 2025
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Gold price stays firm at the $3,340 level as fresh safe-haven demand is building up on increasing trade tensions and a declining risk tone in the global markets. Downbeat equity sentiment fueled by fears over US President Donald Trump’s aggressive tariff strategy and ongoing inflationary pressures is fostering the attractiveness of the non-yielding yellow metal. At the same time, a small retracement in the US Dollar from recent highs is also supportive, although anticipation of sustained higher interest rates by the Federal Reserve might temper meaningful upside. While markets wait for decisive US Producer Price Index data as well as additional comments from the Fed, gold traders are cautiously optimistic. KEY LOOKOUTS • US Producer Price Index data, when released, will likely shape inflation expectations and Fed rate projections, having a direct bearing on gold prices. • Comments from FOMC members, particularly regarding the timing of rate cuts as well as inflation risks, will be closely monitored for any monetary policy guidance. • Persistent trade tensions, such as Trump’s threatened pharmaceutical and copper tariffs, sustain safe-haven demand for gold. • Gold is confronted with instant resistance at $3,342–$3,343 and has to break above this level to challenge higher levels of $3,365 and even the $3,400 level. Gold price remains steady around the $3,340 level as safe-haven interest comes back to the metal with increasing global uncertainties and a modest pullback in the US Dollar. Market mood remains risk-averse due to US President Donald Trump’s aggressive tariff declarations, which have caused concerns for possible inflation hikes and economic repercussions. In the meantime, hopes for the Federal Reserve to maintain higher interest rates for a more extended period of time remain a headwind for the precious metal. With the next US Producer Price Index figures and additional Fed statements looming in the background, investors are exercising caution, balancing geopolitical threats against monetary policy cues. Gold price stabilizes at $3,340 as safe-haven demand is resurgent due to trade tensions and a less positive risk tone. A declining US Dollar provides support, but Fed rate hike prospects could contain further gains. Traders now look for US PPI data and Fed commentary for new direction. • Gold price stabilizes at $3,340, underpinned by safe-haven buying in the face of global risk aversion. • Trade tensions rise as Trump promises new tariffs, fueling inflation and economic hardship concerns. • US Dollar pulls back from multi-week highs, providing modest aid to gold. • Fed likely to hold rates higher for longer, capping meaningful upside for non-yielding metal. • US CPI increased 0.3% in June, spurring concerns over surging inflation from trade policies. • Focus shifts to US PPI and future Fed speeches for leads on monetary policy direction. • Technical resistance at $3,342–$3,343, stronger resistance around $3,365 and $3,400. Gold maintains investor attraction as a safe-haven asset in a heightened global economic uncertainty environment. Recent remarks by US President Donald Trump about imposing sharp tariffs on drug and copper imports fueled renewed fears of inflation triggered by trade and dampened economic growth. The concerns have prompted a wary market sentiment, with stocks under pressure and demand increasing for historically safe-haven assets such as gold. Investors grow nncreasingly worried about the long-term effects these trade policies might have, particularly when inflationary pressures begin to build up. XAU/USD DAILY PRICE CHART SOURCE: TradingView Meanwhile, the US Federal Reserve continues to hold firm on keeping higher interest rates in place to bring inflation under control. Comments from Fed officials such as Susan Collins and Lorie Logan indicate that excessive easing could damage the economy’s momentum for the near future. The combination of ongoing inflation concerns, hawkish monetary policy expectations, and international trade tensions has provided a backdrop under which gold is a strategic hedge. As investors track closely the release of economic data and central bank speeches, gold continues to be an important gauge of market sentiment and risk aversion. TECHNICAL ANALYSIS Gold price is displaying resilience just below $3,340, trading around the 100-period Simple Moving Average (SMA) on the 4-hour chart. Although the metal has halted its pullback from a three-week peak, momentum indicators such as the RSI and MACD remain even-keel, providing no clear indication of a reversal being bullish. A persistent move over the near-term resistance at $3,342–$3,343 can bring out the way to the $3,365–$3,366 region, with additional buying forcing the price nearer to the psychological $3,400 level. On the flip side, any dip below $3,320 may initiate new selling pressure, opening up support at $3,300 and $3,282. FORECAST Should gold be able to maintain the pressure over the $3,342–$3,343 resistance level, it could set the stage for a retest of the $3,365–$3,366 barrier in the near future. A firm break over this point would tend to draw further bullish attention, driving prices toward the psychologically significant $3,400 figure. Ongoing safe-haven buying interest, a correction in the US Dollar, or dovish statements from Federal Reserve representatives could further encourage this rallying action. Conversely, a failure to remain above the $3,320 support may spark a more pronounced corrective fall. In that case, gold could slide towards the critical $3,300 support region, and a breakdown below this level may expose the $3,283–$3,282 level, which was a recent one-week low. A firmer US Dollar, hawkish Fed, or de-escalation of geopolitical tensions could sour the mood and hasten the downside journey to the July swing low near the $3,248–$3,247 range.

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Commodities Gold

Gold Price Stays Below Multi-Week High as Trade Tensions Counter Fed Rate Uncertainty

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  • July 14, 2025
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Gold price stays range-bound below a multi-week high as opposing market forces make traders wary. While lowering expectations of an instant Fed rate cut bolster the US Dollar and negate the non-yielding metal, increasing global trade tensions—particularly new US tariff threats against the EU and Mexico—enforce safe-haven buying. Investors are waiting for next US inflation data for more insight into the direction of Fed’s policy, which will determine the next big move of gold. KEY LOOKOUTS • New tariff threats by President Trump on the EU and Mexico boost global risk aversion, fueling demand for safe-haven assets such as gold. • Fading chances of an imminent Fed rate cut favor the US Dollar, limiting gold’s short-term upside potential. • Traders are looking ahead to significant US inflation data (CPI and PPI) this week, which may define speculation surrounding the Fed’s policy direction and determine gold’s next direction. • The downside in gold seems supported around $3,300, while bulls look to retake the $3,400 level, supported by a bullish technical pattern. Gold price is stabilizing below a multi-week high in a tug-of-war between stronger US Dollar and rising global trade tensions. The fading prospects of an imminent Fed rate cut have boosted the greenback, which is holding back the non-yielding bullion. But new US threats of trade against the European Union and Mexico soured market mood, underpinning gold’s safe-haven allure. With investors looking for decisive US inflation data and additional Fed commentary, gold is stuck in a defensive holding position, with limited downside risk and scope for renewed upside momentum. Gold price trades defensively below recent highs with lower bets on Fed rate cuts underpinning the US Dollar. But increasing trade tensions maintain demand for the safe-haven metal. Investors are awaiting US inflation data for firmer guidance. • Gold price consolidates below a multi-week high, weighed down by improved US Dollar performance. • Lower probability of an imminent Fed rate cut aids the greenback and caps gold’s upside. • US President Trump’s threats to impose tariffs on the EU and Mexico increase global trade tensions and spike safe-haven demand. • Market sentiment remains weak, with investors on edge amid contradictory economic signals. • Near-term US CPI and PPI data are important for determining expectations about the Fed’s next move. • Technical support perceived around $3,300, with bulls looking for a possible move towards $3,400. • FOMC minutes indicate concerns about inflation, supporting speculation of delayed monetary easing. Gold continues to be in the spotlight as a safe-haven asset in a complicated mix of global economic and political developments. The most recent driver has been renewed tensions in trade, ignited by the threat of 30% tariffs on goods from the European Union and Mexico by US President Donald Trump. These declarations have shaken investor confidence, supplemented by an already risk-averse market climate. Consequently, demand for gold—historically regarded as a hedge against uncertainty—has been sustained despite headwinds from other economic influences. XAU/USD DAILY PRICE CHART SOURCE: TradingView Meanwhile, market participants are carefully watching signs from the US Federal Reserve on its monetary policy direction. Although there are still some officials worried about ongoing inflation, the general tone is one of no rush to cut rates immediately. This has supported the US Dollar and created uncertainty around the direction of gold. Meanwhile, investors are waiting for important US inflation readings this week, which are most likely to shape future Fed actions and set the general tone in the wider markets. TECHNICAL ANALYSIS Gold price recently crossed above the 100-period Simple Moving Average (SMA) on the 4-hourly chart and broke through the important $3,358–$3,360 resistance area, indicating bullish momentum. Bullish oscillators on both hourly and daily horizons indicate that the metal may resume its uptrend, with the next target at around the psychological $3,400 level. On the downside, near-term support is at about the $3,300 mark, followed by the $3,283–$3,282 range. A prolonged break below those levels may leave the metal vulnerable to a more significant pullback towards the July swing low around $3,248. FORECAST If safe-haven demand continues to build with rising trade tensions and global uncertainty, gold is set to retake higher ground. A sustained break above the $3,360 level could set the stage for a test of the psychological $3,400 level. Additional bullish pressure could be fueled by weak US inflation data or dovish Fed commentary, sending gold to fresh multi-week highs in the near term. Conversely, if future US economic indicators surprise on the upside and corroborate the argument against near-term rate cuts, the US Dollar can continue to appreciate further, putting downward pressure on gold prices. A fall below the critical $3,300 support level could initiate more selling pressure, sending the metal lower to the $3,283–$3,282 area. A clear cut-through of this level may expose gold to additional risk of decline, potentially stretching down to the $3,248–$3,247 support level.

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Commodities Gold

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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