Safe Haven Flows Flow, Gold Extends Gains
Gold prices strengthened for the fifth consecutive day, as the escalating conflict in the Middle East shook global energy markets and prompted investors to seek safe havens again.
This increase occurred as US President Donald Trump asserted that the military offensive against Iran would continue "for as long as necessary." Meanwhile, Tehran reportedly attacked oil and gas infrastructure and threatened shipping routes in the region, adding to market concerns about energy supplies and regional stability.
The surge in energy prices accompanying the conflict also fueled inflation concerns in the United States. As a result, US government bonds weakened, and the market began to consider the Federal Reserve's potential to hold interest rates longer.
Market participants are now tending to push back expectations of an interest rate cut, with a new cut more likely around September.
In theory, high interest rates can be a drag on gold because it offers no yield. However, in times of heightened uncertainty, especially when inflation is a growing concern, gold is often viewed as a stronger store of value, thus maintaining demand.
The gold price at the time of this analysis's release was at $5,366.
- Buy if the price moves above $5,360.
- Sell if the price moves below $5,372.
Resistance 2: $5,384.
Resistance 1: $5,375.
Support 1: $5,355.
Support 2: $5,343.
Disclaimer
This article is analytical in nature and is not a definitive reference. Please consider the impact of fundamental and technical developments on trading before making any investment decisions. (Cp)
Source: Newsmaker.id
