Gold Price Forecast: XAU/USD rebounds due to cautious markets aiming to reach $2,400

• The price of Gold appreciates due to investors' caution due to the escalation of tensions in the Middle East.
• Jordanian Foreign Minister Ayman Safadi warned that Israeli retaliation against Iranian attacks could aggravate the conflict throughout the region.
• The correction of the US dollar supports the demand for the yellow metal.

The price of Gold recovers its recent losses, trading around $2,380 per troy ounce during the European open on Thursday. The safe-haven yellow metal is gaining ground as traders act cautiously amid rising geopolitical tensions in the Middle East.

According to Reuters reports, Jordanian Foreign Minister Ayman Safadi stated in an interview published by state media on Wednesday that Israeli retaliation against Iranian attacks could pose a significant risk of dragging the entire region into a devastating war. .

Additionally, the Israeli Air Force announced on Wednesday that its fighter jets had attacked Hezbollah infrastructure north of Baalbek, in eastern Lebanon. Concerns are growing that increased exchanges of fire between Israel and Hezbollah could lead to a new escalation.

Israeli Prime Minister Benjamin Netanyahu said Israel would make its own decisions about how to defend itself, as Western countries urged restraint in responding to a series of attacks by Iran.

Meanwhile, the US Dollar Index (DXY) loses ground, mainly influenced by the moderation in US Treasury yields. This correction of the US Dollar makes it cheaper to buy Gold for investors who use other currencies.

Federal Reserve Bank of Cleveland President Loretta Mester acknowledged Wednesday that inflation has exceeded expectations. She stated that the Fed needs more guarantees before confirming the sustainability of 2% inflation.

Additionally, Fed Chair Jerome Powell commented Tuesday that recent data indicates limited inflation progress this year, suggesting a prolonged period before reaching the 2% target. This statement could indicate a hawkish stance in the Fed's upcoming monetary decisions. Rising interest rates could reduce demand for non-yielding assets, such as Gold.