Gold Hesitant, Markets Await Iran's Response and Dollar Direction
Gold prices started the week cautiously with higher energy prices could delay the Fed's rate cut and strengthen the dollar, while continued and varying geopolitical uncertainties are likely to continue to support and prevent prices from a deeper correction.
The latest escalation in the US attack on Iran's nuclear facilities has sparked concerns in the global market, but investors are cautious, and are still waiting for Iran to take real action. The strengthening dollar at the beginning of this week limited gold's rise as the metal became more expensive against other currencies.
On the other hand, safe-haven sentiment driven by global central banks and ETF investments is expected to continue to support prices, even if global tensions ease. Physical demand from the jewelry and industrial sectors—such as electronics and renewable energy—also helped keep downward pressure on prices while the US monetary policy outlook remains a major factor. Inflationary pressures and strong employment data still have the potential to delay interest rate cuts, although a downgrade is starting to appear. The strong USD due to the Fed's policy has encouraged investors to be cautious about buying gold in the short term.
Technical support in the range of US$3,348–3,324 per ounce has proven to be sustainable; if it breaks through, it could test US$3,300.
Resistance is still in the area of US$3,380–3,400, an upward movement to this point will support the potential for a short-term rebound
The medium to long-term target remains optimistic: US$3,900 in 12 months, or even US$4,000+ if geopolitical escalation increases again.
Source: (mrv@Newsmaker)
