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Gold Price Settles After Brief Spike on Middle East Tensions

Gold price (XAU/USD) pares gains despite looming Middle East tensions, as investors await further developments regarding Israel’s retaliatory attack on Iran. While initial fears boosted safe-haven demand, easing concerns limit the upside for Gold.

Key Factors:

  • Geopolitical Tensions: Israel’s airstrike on Iran initially triggers safe-haven flows, but de-escalating rhetoric eases market jitters.
  • Hawkish Fed: Fed policymakers’ focus on higher-for-longer interest rates remains a headwind for Gold. However, recent commentary hasn’t significantly impacted US Treasury yields.
  • Global Rate Outlook: Investors reassess rate cut expectations for other central banks, potentially reducing the downside pressure on the US Dollar and, consequently, Gold.

Technical Analysis:

  • Consolidation Near $2,400: Gold faces resistance near the $2,400 psychological level, leading to some consolidation as markets await further catalysts.
  • Overbought Conditions: Momentum oscillators cool down after briefly signaling overbought territory, suggesting a potential pause in the rally.
  • Key Support Levels: April 5 low ($2,268) and March 21 high ($2,223) offer critical support zones.