Once again, gold has confirmed its key role as a safe haven amid market uncertainty.
Growing geopolitical concerns from escalating tensions in Israel and Gaza increased investors’ demand for bullion and pushed the price higher. In the last few days, gold has been supported by dovish remarks from Federal Reserve key speakers, after months of hawkish rhetoric and rate hikes.
The temporary weakness of the greenback and the decline of yields are also supportive factors for gold. As a result, yesterday we saw the precious metal extending its gains and consolidating above the support zone of $1,850.
For the time being, the next key resistance zone, at $1,890, remains relatively far away, with the gold price currently steady around $1,860. Although from a technical perspective, the scenario has improved.
The gold spot price has shown resilience remaining above the $1,850 threshold in the last 24 hours, while volatility has declined. Investors are now waiting for the release of the minutes from today’s Federal Open Market Committee (FOMC), and US inflation data, which will be released tomorrow. The reports are forecast to show a decline from 3.7% to 3.6%.
A confirmation of these expectations could reinforce the notion that a peak in interest rates for this cycle has been reached – or at least, is extremely near. This is all supportive of gold.
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